EXHIBIT 2.1
Execution Version
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ASSET PURCHASE AGREEMENT
BY AND AMONG
FTI CONSULTING, INC.,
LI ACQUISITION COMPANY, LLC,
NEXTERA ENTERPRISES, INC.,
LEXECON INC.,
CE ACQUISITION CORP.
AND
ERG ACQUISITION CORP.
DATED: SEPTEMBER 25, 2003
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TABLE OF CONTENTS
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Article I ASSETS TO BE PURCHASED........................................................................ 1
Section 1.1. Description of Assets............................................................ 1
Section 1.2. Excluded Assets.................................................................. 3
Section 1.3. Consent to Assignment of Certain Assets.......................................... 4
Article II ASSUMPTION OF OBLIGATIONS..................................................................... 5
Section 2.1. Assumption of Certain Obligations................................................ 5
Section 2.2. Excluded Liabilities; Buyer Not Successor........................................ 5
Article III PURCHASE PRICE................................................................................ 6
Section 3.1. Consideration.................................................................... 6
Section 3.2. Payment.......................................................................... 6
Section 3.3. Purchase Price Allocation........................................................ 7
Section 3.4. Transfer Taxes................................................................... 7
Section 3.5. Closing Balance Sheet; Accounts Receivable; Escrow Amount........................ 7
Section 3.6. Accounts Receivable and Prepaid Expenses......................................... 11
Article IV CLOSING AND POST-CLOSING COOPERATION.......................................................... 11
Section 4.1. Closing.......................................................................... 11
Section 4.2. Actions of Sellers at Closing.................................................... 12
Section 4.3. Actions of Buyer at Closing...................................................... 12
Section 4.4. Additional Acts.................................................................. 12
Article V REPRESENTATIONS AND WARRANTIES OF NEXTERA AND SELLERS......................................... 12
Section 5.1. Corporate Organization........................................................... 12
Section 5.2. Authorization of Sellers......................................................... 13
Section 5.3. Financial Statements............................................................. 14
Section 5.4. Absence of Certain Changes or Events............................................. 14
Section 5.5. Undisclosed Liabilities.......................................................... 16
Section 5.6. Taxes............................................................................ 17
Section 5.7. Compliance With Law.............................................................. 18
Section 5.8. Proprietary Rights............................................................... 18
Section 5.9. Insurance........................................................................ 19
Section 5.10. Bank Accounts, Depositories, Powers of Attorney.................................. 19
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Section 5.11. Title to Properties.............................................................. 19
Section 5.12. Brokers, Finders................................................................. 20
Section 5.13. Legal Proceedings, etc........................................................... 20
Section 5.14. No Conflict or Default; Consents................................................. 20
Section 5.15. Labor Relations.................................................................. 21
Section 5.16. Employee Benefit Plans; ERISA.................................................... 22
Section 5.17. Contracts and Commitments........................................................ 23
Section 5.18. Receivables; Payables............................................................ 24
Section 5.19. Books of Account; Records........................................................ 24
Section 5.20. Officers, Employees and Compensation............................................. 24
Section 5.21. Real Property Leases............................................................. 25
Section 5.22. Personal Property Leases......................................................... 25
Section 5.23. Environmental Matters............................................................ 25
Section 5.24. Complete Disclosure.............................................................. 26
Section 5.25. Agreements and Transactions with Related Parties................................. 26
Section 5.26. Clients and Customers............................................................ 26
Section 5.27. Work-In-Process.................................................................. 27
Section 5.28. Solvency......................................................................... 27
Section 5.29. No Other Representations......................................................... 28
Article VI REPRESENTATIONS AND WARRANTIES OF BUYER AND FTI............................................... 28
Section 6.1. Organization..................................................................... 28
Section 6.2. Authorization of Buyer........................................................... 28
Section 6.3. Non-Contravention................................................................ 28
Section 6.4. Brokers.......................................................................... 29
Section 6.5. Legal Proceedings, etc........................................................... 29
Article VII COVENANTS OF SELLERS AND NEXTERA.............................................................. 29
Section 7.1. Change of Name; Use of Name...................................................... 29
Section 7.2. Conduct of Business Prior to the Closing......................................... 29
Section 7.3. Stockholder Meeting.............................................................. 32
Section 7.4. Non-Solicitation................................................................. 32
Section 7.5. Payoff of Indebtedness........................................................... 34
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Section 7.6. Employment Agreements............................................................ 35
Section 7.7. Covenant Against Hiring.......................................................... 35
Section 7.8. Noncompetition................................................................... 35
Section 7.9. Legal Examination and Investigation.............................................. 35
Section 7.10. Notice of Events................................................................. 36
Section 7.11. Tail Insurance................................................................... 36
Article VIII COVENANTS OF SELLERS AND BUYER ............................................................... 36
Section 8.1. Xxxx-Xxxxx-Xxxxxx and Other Filings.............................................. 36
Section 8.2. Proxy Statement.................................................................. 37
Section 8.3. Public Announcements............................................................. 37
Section 8.4. Employment Matters............................................................... 37
Section 8.5. Confidentiality Agreement........................................................ 39
Section 8.6. Efforts to Satisfy Conditions.................................................... 39
Section 8.7. Bulk Sales....................................................................... 39
Article IX CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND FTI.......................................... 39
Section 9.1. Nextera Stockholder Approval..................................................... 39
Section 9.2. HSR Act; Consents; Filings....................................................... 39
Section 9.3. Representations and Warranties................................................... 40
Section 9.4. Officers' Certificate............................................................ 40
Section 9.5. Closing Certificates............................................................. 40
Section 9.6. Voting Agreement................................................................. 41
Section 9.7. Opinion of Counsel............................................................... 41
Section 9.8. Solvency Opinion/Fair Value...................................................... 41
Section 9.9. Fairness Opinion................................................................. 41
Section 9.10. Performance of Agreement......................................................... 41
Section 9.11. No Adverse Change................................................................ 41
Section 9.12. No Proceedings................................................................... 41
Section 9.13. Employment Agreements............................................................ 42
Section 9.14. Assignment of Leases............................................................. 42
Section 9.15. Xxxx of Sale..................................................................... 42
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Section 9.16. Transfer of Name and other Proprietary Rights.................................... 42
Section 9.17. Receipt.......................................................................... 42
Section 9.18. Evidence of Payoff............................................................... 42
Section 9.19. Non-Compete Payments............................................................. 42
Section 9.20. "FIRPTA" affidavits.............................................................. 43
Section 9.21. Other............................................................................ 43
Article X CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS................................................ 43
Section 10.1. Nextera Stockholder Approval..................................................... 43
Section 10.2. HSR Act; Consents; Filings....................................................... 43
Section 10.3. Representations and Warranties................................................... 43
Section 10.4. Officer' Certificate............................................................. 43
Section 10.5. Closing Certificates............................................................. 44
Section 10.6. Solvency Opinion/Fair Value...................................................... 44
Section 10.7. Fairness Opinion................................................................. 44
Section 10.8. Assumption Agreement............................................................. 44
Section 10.9. Opinion of Counsel............................................................... 44
Section 10.10. Payments at Closing.............................................................. 44
Section 10.11. Performance of Agreement......................................................... 45
Section 10.12. No Adverse Proceeding............................................................ 45
Article XI INDEMNIFICATION............................................................................... 45
Section 11.1. Survival of Representations, Warranties and Agreements........................... 45
Section 11.2. Indemnification by Sellers and Nextera........................................... 45
Section 11.3. Indemnification by Buyer and FTI................................................. 46
Section 11.4. Limitations on Indemnification................................................... 47
Section 11.5. Procedure for Indemnification with Respect to Third-Party Claims................. 48
Section 11.6. Insurance Proceeds; Recoveries under Section 3.5................................. 48
Article XII TERMINATION................................................................................... 49
Section 12.1. Termination...................................................................... 49
Section 12.2. Effect of Termination............................................................ 50
Section 12.3. Fees And Expenses................................................................ 52
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TABLE OF CONTENTS
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Article XIII MISCELLANEOUS PROVISIONS...................................................................... 52
Section 13.1. Notices.......................................................................... 52
Section 13.2. Entire Agreement................................................................. 53
Section 13.3. Binding Effect; Assignment....................................................... 53
Section 13.4. Captions......................................................................... 53
Section 13.5. Waiver; Consent.................................................................. 53
Section 13.6. No Third Party Beneficiaries..................................................... 53
Section 13.7. Counterparts..................................................................... 53
Section 13.8. Gender........................................................................... 53
Section 13.9. Remedies of Buyer................................................................ 54
Section 13.10. No Personal Liability............................................................ 54
Section 13.11. Governing Law.................................................................... 54
Section 13.12. Definitions...................................................................... 54
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT") is made as of
September 25, 2003, by and among FTI Consulting, Inc., a Maryland corporation
("FTI"), LI Acquisition Company, LLC, a Maryland limited liability company and a
wholly-owned subsidiary of FTI ("BUYER"), Nextera Enterprises, Inc., a Delaware
corporation ("NEXTERA"), Lexecon Inc., an Illinois corporation and a
wholly-owned subsidiary of Nextera ("LEXECON"), CE Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Lexecon ("CE"), and ERG Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of Lexecon ("ERG"
and, together with Lexecon and CE, collectively, the "SELLERS"). FTI, Buyer,
Nextera and Sellers are hereinafter sometimes referred to herein as the
"PARTIES".
PRELIMINARY STATEMENTS
A. Sellers are in the business of providing economics consulting
services, including litigation support, public policy studies and business
consulting (the "BUSINESS").
X. Xxxxxxx and Nextera desire to sell and Buyer desires to
purchase substantially all the assets of Sellers and Nextera used in the
Business and assume the Assumed Liabilities, on the terms and conditions set
forth in this Agreement.
C. Concurrently with the execution of this Agreement, certain
stockholders have executed and delivered to Buyer the voting agreement in the
form attached hereto as Exhibit A (the "VOTING AGREEMENT").
D. Certain defined terms used in this Agreement are defined in
Section 13.12 below.
NOW, THEREFORE, in consideration of these premises, the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto agree as follows:
ARTICLE I
ASSETS TO BE PURCHASED
Section 1.1. Description of Assets. Upon the terms and subject to
the conditions set forth in this Agreement, at the Closing, Sellers shall
convey, sell, transfer, assign and deliver to Buyer, and Buyer shall purchase
and assume from Sellers, all right, title and interest of Sellers at the Closing
in and to all of the assets, properties, rights (contractual or otherwise) and
business of Sellers of every kind, nature and description, real, personal and
mixed, tangible and intangible, known or unknown, wherever located that are
owned or used by Sellers, including, without limitation Sellers' Cambridge,
Massachusetts (both Harvard Square and Xxxxxxx Square) and Chicago, Illinois
operations, related to or used by or in the Business, and including, without
limiting the generality of the foregoing, but excluding the Excluded Assets:
(a) All rights and claims under leases of real property
used in the Business, including those described on Schedule 1.1(a),
along with all improvements, appurtenant
rights, easements and privileges appertaining or relating thereto (the
"REAL PROPERTY LEASES");
(b) All equipment, furniture, supplies, including, to the
extent assignable by Sellers, off-the-shelf software and other tangible
personal property used in or by the Business and owned or used by
Sellers (the "PERSONAL PROPERTY");
(c) All claims and rights, including refunds, under court
approved retentions, contracts, agreements, contract rights, license
agreements, franchise rights and agreements, purchase and sales orders,
quotations and executory commitments, instruments, guaranties,
indemnifications, leases, the existing "key man" insurance policies
listed on Schedule 1.1(c), arrangements, and understandings of Sellers
or Nextera related to the Business, whether oral or written, to which
Sellers or Nextera is a party, in each case, to the extent assignable
by Sellers or Nextera (whether or not legally bound thereby) (the
"CONTRACTS");
(d) All client work and client work product related to
the Business that has been performed or is in the process of being
performed on the Closing Date, which has not yet been completed or has
not yet been billed and which is reasonably expected to be ultimately
billed in the ordinary course of business (the "WORK-IN-PROCESS");
(e) All automobiles and other vehicles used in or by the
Business and owned or used by Sellers;
(f) All franchises, licenses, permits, consents,
authorizations, approvals, and certificates of any regulatory,
administrative or other Governmental Authority or body related to the
Business, including those described on Schedule 1.1(f) (the "Permits");
(g) All (i) patents and patent applications
(collectively, "PATENTS"); (ii) trademarks, service marks, logos,
symbols, and trade names and all goodwill associated therewith
(collectively, "MARKS"); (iii) copyrights and registrations and
applications therefor (collectively, "COPYRIGHTS"); (iv) except as
described on Schedule 1.1(g), trade secrets, processes, proprietary
knowledge (collectively, "TRADE SECRETS"); (v) except as described on
Schedule 1.1(g), computer programs and software, (collectively,
"SOFTWARE"); and (vi) licenses, sublicenses or agreements in respect
thereof which Sellers own or have the right to use or to which Sellers
are a party and which are used by or in connection with the Business
(collectively "LICENSES" and together with the Patents, Marks,
Copyrights, Trade Secrets and Software, the "PROPRIETARY RIGHTS"),
including, in each case, those described on Schedule 1.1(g);
(h) All claims and rights under leases of equipment,
vehicles or other tangible personal property used in or by the
Business, including those described on Schedule 1.1(h) (the "PERSONAL
PROPERTY LEASES");
(i) Except for the Withheld Receivables, all accounts and
notes receivable, investments, deposits and prepaid expenses related to
the Business (the "RECEIVABLES");
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(j) All marketable and non-marketable securities and
other investments, all rights in any funds of any nature (including,
without limitation, funds relating to vacation pay, workers'
compensation, unemployment compensation and other employee benefits),
utility deposits, deposits under Real Property Leases owned by Sellers
and related to the Business, wherever maintained or held, but excluding
any letters of credit posted by Sellers or Nextera as deposits under
such Real Property Leases;
(k) All rights of Sellers or Nextera under or pursuant to
all warranties, representations and guarantees made by suppliers,
manufacturers and contractors in connection with products sold,
services provided, or property leased to Sellers or Nextera related to
the Business or made by Sellers or Nextera in connection with services
performed by Sellers related to the Business, or affecting the
property, machinery or equipment used in or by the Business (the
"WARRANTIES");
(l) All causes of action, judgments and claims or demands
against others of whatever kind or description related to the Business
(the "CLAIMS");
(m) All books of account, customer lists, price lists,
correspondence, data, sales literature, sales data, accounting
information relating to the Business, client files (for active and
inactive matters), books and records, files, personnel files of
Sellers' employees who are employed by Buyer from and after the
Closing, data bases, manuals, e-mails, ledgers, papers and records and
tax returns, in whatever form or medium related to the Business (the
"BUSINESS RECORDS");
(n) All goodwill related to the Business (the
"GOODWILL");
(o) All telephone numbers, e-mail addresses, websites,
domain names, servers and networks for any of Sellers' offices or
facilities related to the Business, including, without limitation, the
telephone numbers, e-mail addresses, domain names, websites, servers
and networks listed on Schedule 1.1(o);
(p) All assets associated with the Assumed Employment
Liabilities; and
(q) Except for the Excluded Assets (as defined in Section
1.2), all other property owned or used by Sellers or Nextera, whether
tangible or intangible, used by or in the Business and located at any
of the offices or facilities described on Schedule 1.1(a), whether or
not reflected on any balance sheets of Sellers or Nextera.
The foregoing, which (except for the Excluded Assets) are hereinafter referred
to as the "ASSETS," comprise substantially all of the property and assets used
in the conduct and operation of the Business as of the date of this Agreement,
and shall include all assets acquired in the ordinary course of the Business
between the date of this Agreement and the Closing Date. At Closing, Sellers
shall convey to Buyer good and marketable title to the Assets that are owned by
Sellers and good title to the Assets that are not owned by Sellers, free and
clear of all Encumbrances, except as expressly provided herein to the contrary.
Section 1.2. Excluded Assets. There shall be excluded from the
definition of Assets, and there shall be no conveyance, sale, transfer,
assignment or delivery to Buyer of:
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(a) All corporate minutes books, stock records, corporate
seals, and treasury shares of Sellers (all of which shall be subject to
Buyer's right to inspect and copy);
(b) Items disposed of between signing and Closing in the
ordinary course of business consistent with this Agreement, and those
items listed on Schedule 1.2(b);
(c) All Withheld Receivables;
(d) All capital stock of CE and ERG;
(e) All consideration received by Sellers or Nextera in
the transactions contemplated by this Agreement;
(f) The Internet website found at the uniform resource
locator xxx.xxxxxxx.xxx and all related websites, but excluding any
websites listed on Schedule 1.1(o);
(g) Copies of all records that are transferred to Buyer;
and
(h) All Seller Plans and Non-Compete Agreements and all
assets associated with the Seller Plans or the Non-Compete Agreements.
All of the assets excluded from the definition of Assets pursuant to this
Section 1.2 are hereinafter collectively referred to as the "EXCLUDED ASSETS."
Section 1.3. Consent to Assignment of Certain Assets. Schedule 1.3
lists and describes all Assets which are non-assignable or the assignment of
which pursuant hereto requires the consent of any other party as well as all
consents of any Governmental Authority required to be obtained in connection
with the transactions contemplated hereby. Notwithstanding anything to the
contrary in this Agreement, to the extent that the assignment hereunder of any
of the Assets shall require the consent of any other party (or in the event that
any of the same shall be non-assignable), neither this Agreement nor any action
taken pursuant to its provisions shall constitute an assignment or an agreement
to assign if such assignment or attempted assignment would constitute a breach
thereof or result in the loss or diminution thereof; provided, however, that in
each such case, Sellers and Nextera shall each use their commercially reasonable
efforts, and Buyer shall reasonably cooperate with Sellers and Nextera, to
obtain the consent of such other party to an assignment to Buyer; provided, that
neither Nextera nor any of Sellers will be required to pay any consent fees,
commence any litigation or make any other concessions to any person in order to
obtain any such consent. If such consent is not obtained, Sellers and Nextera
shall cooperate with Buyer, in all material respects, to provide for Buyer the
benefits of such Assets including, without limitation, enforcement for the
account and benefit of Buyer of any and all rights of Sellers or Nextera against
any other Person with respect to such Assets.
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ARTICLE II
ASSUMPTION OF OBLIGATIONS
Section 2.1. Assumption of Certain Obligations. Subject to the
provisions of this Agreement, from and after the Closing Date, Buyer shall
assume the following liabilities and obligations of Sellers, to the extent the
same have not been discharged or satisfied prior to the Closing Date (the
"ASSUMED LIABILITIES"):
(a) The ordinary operating liabilities of Sellers related
to the Business that are due and payable after the Closing;
(b) The future payment and performance of the obligations
accruing and arising after the Closing Date relating to the Assets,
including, without limitation, customer contracts, Real Property
Leases, Personal Property Leases, Permits and other Contracts assigned
to Buyer at the Closing;
(c) The Assumed Employment Liabilities; and
(d) Liabilities and obligations arising out of the Assets
or related to the Business, but only to the extent such liabilities and
obligations arise or are first required to be performed after the
Closing Date.
Section 2.2. Excluded Liabilities; Buyer Not Successor.
(a) Except as expressly provided to the contrary in
Section 2.1 above, Buyer shall not by the execution and performance of
this Agreement, or otherwise under any circumstance, assume or
otherwise be responsible for any Liability or obligation of any nature
of Nextera or Sellers, or claims of such Liability or obligation,
including, without limitation, those arising from: (i) all Taxes of any
kind whatsoever arising from the Assets or operation of the Business,
but only to the extent attributable to any Pre-closing Tax Period; (ii)
any occurrence or circumstance (whether known or unknown) which occurs
or exists prior to the Closing Date and which constitutes, or which by
the lapse of time or delivery of notice (or both) would constitute, a
breach or default under any Real Property Leases, Permits, Personal
Property Leases or other Contracts of Sellers or Nextera (whether
written or oral); (iii) any occurrence or circumstance (whether known
or unknown) which occurs or exists prior to the Closing Date and which
constitutes, or which by the lapse of time or delivery of notice (or
both) would constitute, a violation of the requirements of any
Governmental Authority or of the rights of any third person, including,
without limitation, requirements relating to the reporting or payment
(or both) of federal, state, local or foreign income, property or other
Taxes; (iv) Indebtedness of Sellers or Nextera; (v) any environmental
Liabilities (including without limitation any environmental Liabilities
related to the disclosures contained on Schedule 5.23), Liabilities for
death or destruction of property or any Liabilities for breach of
warranties of Sellers or Nextera in the provision of services or any
Liabilities or any Liabilities for acts or omissions of Sellers or
Nextera or their employees prior to the Closing Date, in each case
arising from events or occurrences which occurred prior to the Closing
Date;
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(vi) any Seller Plan Liabilities that are not Assumed Employment
Liabilities; (vii) any Liabilities, other than Assumed Employment
Liabilities, that arise under Sellers' non-compete and employment
agreements with Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxxx and Xxxxx
Xxxxxxx and any other employee of Sellers or Nextera, including,
without limitation, any and all non-compete payments payable thereunder
and the non-compete payments listed on Schedule 9.19 (including any and
all possible payments relating to all future extensions thereof except
extensions made by FTI or Buyer) (the "NON-COMPETE AGREEMENTS"); (viii)
any Liabilities accruing on or prior to the Closing relating to
Sellers' employment or termination of Sellers' employees that are not
Assumed Employment Liabilities; (ix) any liability arising out of any
Litigation pending on the Closing Date, whether or not disclosed to
Buyer; and (x) any other claims of any kind whatsoever or any other
Liabilities of Sellers or Nextera, direct or indirect (collectively,
the "EXCLUDED LIABILITIES").
(b) Except as expressly provided in Section 2.1 above,
the Parties agree that Buyer shall not be the successor to Sellers.
Sellers shall retain, pay, perform and discharge the Excluded
Liabilities.
ARTICLE III
PURCHASE PRICE
Section 3.1. Consideration. In consideration for the Assets and in
full payment therefor: (a) Buyer shall assume the Assumed Liabilities as
provided in Section 2.1 of this Agreement, (b) Buyer shall pay or caused to be
paid to Sellers, in accordance with Section 3.2(a), an amount in cash equal to
One Hundred Thirty Million Dollars ($130,000,000) and (c) Buyer shall pay or
caused to be paid to Sellers, in accordance with Section 3.2(c), the amount of
the Medical Plan Payment (with the items referred to in clauses (a), (b) and (c)
being referred to collectively as the "PURCHASE PRICE").
Section 3.2. Payment. At the Closing:
(a) Buyer shall pay to Sellers the amount set forth in
Section 3.1(b), less the Escrow Amount and less any Estimated Working
Capital Discrepancy Amount required pursuant to the last phrase of
Section 3.5(d) (such net amount, the "CASH CLOSING AMOUNT"), in
immediately available cash funds by wire transfer to an account
designated by Sellers at least five (5) days prior to the Closing;
provided that the Cash Closing Amount shall be reduced by the amount
paid by Buyer, on behalf of Sellers and Nextera, to repay and discharge
in full the Indebtedness of Sellers referenced in clauses (i), (ii),
(iv) and (viii) of the definition of Indebtedness.
(b) Buyer shall deposit the Escrow Amount into a third
party escrow account with a third party escrow agent and the parties
and such escrow agent shall execute an escrow agreement in the form
attached hereto as Exhibit B (the "ESCROW AGREEMENT"). Sellers, on the
one hand, and Buyer, on the other hand, agree to each pay one-half of
any fees or charges under the Escrow Agreement.
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(c) Buyer shall pay to Sellers the Medical Plan Payment
in immediately available cash funds by wire transfer to an account
designated by Sellers at least five (5) days prior to the Closing.
Section 3.3. Purchase Price Allocation. The parties hereby agree
that the Purchase Price shall be allocated to the Assets and Assumed Liabilities
in the manner agreed to by the Parties in writing prior to the Closing Date. The
Parties covenant and agree to file all federal, state, local and foreign tax
returns in accordance with such allocations and to report the Closing as a
taxable transaction.
Section 3.4. Transfer Taxes. All transfer, gains, sales, bulk
sales, use and similar conveyance Taxes imposed by reason of the transactions
contemplated hereby and any deficiency, interest or penalty asserted with
respect thereto shall be paid in accordance with local law and custom.
Section 3.5. Closing Balance Sheet; Accounts Receivable; Escrow
Amount.
(a) Sellers have delivered to FTI and Buyer a schedule of
Sellers' consolidated Working Capital for the fiscal quarters ended
June 30, 2001 through June 30, 2003 (the "WORKING CAPITAL SCHEDULE").
The Working Capital Schedule has been prepared by Sellers in good
faith, in accordance with GAAP on a pro forma basis from the books and
records of Sellers, fairly presents in all material respects the
consolidated Working Capital of Sellers for the time periods indicated
and excludes the Excluded Liabilities.
(b) No later than five (5) days prior to the Closing
Date, Sellers shall (i) prepare and deliver to Buyer an estimated
consolidated balance sheet of Sellers dated as of the estimated date of
Closing (the "ESTIMATED CLOSING BALANCE SHEET") and a calculation of
Sellers' estimated Working Capital as of the Closing Date (the
"ESTIMATED CLOSING WORKING CAPITAL"), (ii) designate in writing the
accounts receivable from one or more of the customers listed on
Schedule 13.12 that shall be "WITHHELD RECEIVABLES" hereunder and (iii)
designate in writing the amount of such Withheld Receivables. Following
delivery of the Estimated Closing Balance Sheet and Sellers' Withheld
Receivables designations, Buyer will have the right to make reasonable
inquiries regarding the Estimated Closing Balance Sheet and the amount
of Sellers' Withheld Receivables, and Sellers shall use commercially
reasonable efforts prior to the Closing Date to provide to Buyer such
additional information and answers to such inquiries. The Estimated
Closing Balance Sheet shall be prepared in good faith in accordance
with GAAP on a pro forma basis in a manner consistent with the Working
Capital Schedule and shall represent Sellers' good faith estimate of
the assets and liabilities of the Business to be transferred to Buyer
at the Closing and fairly present in all material respects the
estimated financial position of such Business as of the Closing Date.
The calculation of Estimated Closing Working Capital shall be made in
good faith based on the Estimated Closing Balance Sheet.
(c) Following the Closing, subject to Section 3.5(d)
below, Buyer shall notify each client with accounts receivable
designated by Sellers as Withheld Receivables and
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instruct such client to pay and deliver the Withheld Receivables to
Nextera or Sellers in the manner reasonably requested by Sellers and
shall promptly (and in any event within five (5) Business Days) forward
to Nextera the amount of any Withheld Receivables received by Buyer
following such instructions.
(d) If the Estimated Closing Working Capital is less than
Six Million, Five Hundred Twenty-Two Thousand, Eight Hundred Dollars
($6,522,800) (the "WORKING CAPITAL TARGET"), then accounts receivable
equal to the amount by which the Working Capital Target exceeds the
Estimated Closing Working Capital (the "ESTIMATED WORKING CAPITAL
DISCREPANCY AMOUNT") shall be deducted from the Withheld Receivables
(by transferring such Receivables to Buyer at Closing) until exhausted
and then from the Purchase Price, not to exceed the Estimated Working
Capital Discrepancy Amount in the aggregate. Solely for the purpose of
determining the Estimated Closing Working Capital and the Closing
Working Capital, the Parties agree that an amount equal to one-half
(1/2) of the Seller Plan Payments shall be deemed to be a Current
Liability and included in the calculation of Estimated Closing Working
Capital and the Closing Working Capital under this Section 3.5.
(e) During the one hundred twenty (120)-day period
immediately following the Closing Date (the "COLLECTION REVIEW
PERIOD"), FTI shall:
(i) (A) use its commercially reasonable efforts
to collect all accounts receivable represented on the Estimated Closing
Balance Sheet as accounts receivable or as revenues earned on the date
of the Estimated Closing Balance Sheet but not invoiced by Sellers on
such date, provided, however that neither FTI nor Buyer shall be
required to pay any fees, commence any litigation or make any other
concessions to any person in performing such activities, and (B)
provide notice to Sellers of any determination by FTI or Buyer that any
accounts receivable represented on the Estimated Closing Balance Sheet
are uncollectible, any such determination to be made by Buyer acting in
good faith; and
(ii) during the first sixty (60) days of the
Collection Review Period, cause its employees or Ernst & Young LLP to
prepare and deliver to Nextera and Sellers (i) an actual consolidated
balance sheet of Sellers as of the Closing Date (the "CLOSING DATE
BALANCE SHEET") prepared in good faith in accordance with GAAP on a pro
forma basis in a manner consistent with the Working Capital Schedule
and the Estimated Closing Balance Sheet, which shall represent FTI's
and Buyer's good faith estimate of the assets and liabilities of the
Business as of the Closing Date and fairly present in all material
respects the financial position of such Business as of the Closing
Date, (ii) a calculation of Sellers' Working Capital as of the Closing
Date (the "CLOSING WORKING CAPITAL"), which shall be determined in good
faith based on the Closing Date Balance Sheet and (iii) a calculation
of the Closing Working Capital Discrepancy Amount (if any) or the
Discrepancy Repayment (if any), each determined in good faith in
accordance with Section 3.5(f).
(f) If the sum of the Closing Working Capital plus the
Estimated Working Capital Discrepancy Amount (if any) is less than the
Working Capital Target, then Sellers
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and Buyer shall make a joint instruction to the Escrow Agent to deliver
to Buyer such portion of the Escrow Amount as is equal to the amount by
which the sum of the Closing Working Capital plus the Estimated Working
Capital Discrepancy Amount (if any) is less than the Working Capital
Target (the "CLOSING WORKING CAPITAL DISCREPANCY AMOUNT"). If the
Closing Working Capital exceeds the Working Capital Target, Buyer shall
immediately repay to Sellers any Estimated Working Capital Discrepancy
Amount deducted pursuant to Section 3.5(d) (the "DISCREPANCY
REPAYMENT") in immediately available cash funds by wire transfer to the
account designated by Sellers under Section 3.2(a).
(g) At the end of the Collection Review Period, FTI and
Buyer shall make and deliver to Nextera and Sellers a determination of
the amount of the specific accounts receivable represented on the
Estimated Closing Balance Sheet (such accounts receivables represented
on the Estimated Closing Date Balance Sheet being the "BASE
RECEIVABLES") that remain uncollected at the end of the Collection
Review Period and that FTI and Buyer determine, acting in good faith,
to be still collectible (the "COLLECTIBLE ACCOUNTS RECEIVABLE
DETERMINATION"). Thereafter:
(i) if (D + E) is less than (A - B - C) [with such factors as
defined below], then, unless Nextera or Sellers dispute any
portion of such Collectible Accounts Receivable Determination
in accordance with Section 3.5(h), Sellers and Buyer shall
make a joint instruction to the Escrow Agent (or either Party
may submit the Accounting Referee determination, as the case
may be) to deliver to Buyer such portion of the Escrow Amount
as is equal to the dollar amount (not to exceed the balance of
the Escrow Account) by which (D + E) is less than (A - B - C);
and
(ii) if (D + E) is greater than or equal to (A - B - C), then
Buyer and FTI shall not be entitled to receive any amounts
from the Escrow Account with respect to the collectibility or
uncollectibility of the Base Receivables;
in each of (i) and (ii) above, where:
A = Aggregate amount of Base Receivables;
B = Specific reserves set forth on the Estimated Closing
Balance Sheet with respect to the Base Receivables;
C = General reserve for doubtful accounts set forth on the
Estimated Closing Balance Sheet;
D = Aggregate collections with respect to the Base Receivables
during the Collection Review Period; and
E = Aggregate amount of not yet collected Base Receivables for
which Buyer and FTI have made a Collectible Accounts
Receivable Determination.
By way of example only, if at the Closing, A = $21,000,000, B
= $2,000,000 and C = $1,000,000, and if at the end of the Collection
Review Period D = $15,000,000 and
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E = $4,000,000, then D + E = $19,000,000, and A - B - C = $18,000,000,
then Buyer and FTI shall not be entitled to receive any amounts from
the Escrow Account with respect to the collectibility or
uncollectibility of the Base Receivables.
(h) If Nextera or Sellers in good faith disagree with (i)
the Collectible Accounts Receivable Determination or (ii) any portion
of the Closing Date Balance Sheet, the Closing Working Capital, the
Closing Working Capital Discrepancy Amount (if any) or the Discrepancy
Repayment (if any), then Sellers may until ten (10) Business Days after
receipt of the Collectible Accounts Receivable Determination (in the
case of a disagreement related to the Collectible Accounts Receivable
Determination) or the Closing Date Balance Sheet (in the case of a
disagreement related to the Closing Date Balance Sheet, the Closing
Working Capital, the Closing Working Capital Discrepancy Amount (if
any) or the Discrepancy Repayment (if any)), deliver a written notice
to FTI setting forth in reasonable detail its disagreement and the
basis of such a disagreement. If no such notice of disagreement is
timely delivered, then any Collectible Accounts Receivable
Determination, on the one hand, and/or the Closing Date Balance Sheet,
Closing Working Capital, the Closing Working Capital Discrepancy Amount
(if any) and the Discrepancy Repayment (if any), on the other hand,
shall be final and binding on the Parties hereto.
(i) If a notice of disagreement shall be timely delivered
pursuant to Section 3.5(h), then Nextera and FTI shall, during the ten
(10) Business Days following such delivery, use commercially reasonable
efforts to seek in good faith to reach agreement on the disputed items.
If such an agreement is reached during this period, the Parties'
agreement regarding any Collectible Accounts Receivable Determination,
on the one hand, and/or the Closing Date Balance Sheet, Closing Working
Capital, the Closing Working Capital Discrepancy Amount (if any) or the
Discrepancy Repayment (if any), on the other hand, shall be final and
binding on the Parties. If Nextera and FTI are unable to reach such
agreement, the New York City office of BDO Xxxxxxx (the "ACCOUNTING
REFEREE") shall be retained to review promptly this Agreement and the
disputed items or amounts. In connection therewith, the Accounting
Referee shall promptly review this Agreement and shall consider only
those items or amounts in dispute. The Accounting Referee shall deliver
to Nextera and FTI as promptly as practicable, and within thirty (30)
days after being referred the matter, a report setting forth its
adjustments (if any) to any Collectible Accounts Receivable
Determination and/or the Closing Date Balance Sheet, Closing Working
Capital, the Closing Working Capital Discrepancy Amount (if any) or the
Discrepancy Repayment (if any), as applicable, and the calculations
supporting such determinations. The Collectible Accounts Receivable
Determination and/or the Closing Date Balance Sheet, Closing Working
Capital, the Closing Working Capital Discrepancy Amount (if any) or the
Discrepancy Repayment (if any), each as adjusted pursuant to such
report shall be final and binding on the Parties hereto and shall be
submitted to the Escrow Agent with specific instructions from the
Accounting Referee to release funds from the escrow account, the amount
of such funds and the Party to receive such funds. The non-prevailing
Party shall pay the fees and expenses of the Accounting Referee;
provided, however, that in the event of a compromise between the
positions of the Parties, such fees and expenses shall be prorated
based on the relative success of the Parties in prevailing on their
respective positions.
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(j) Buyer agrees that it shall have no recourse for any
amounts under Sections 3.5(f), (g), (h), or (i) in excess of the Escrow
Amount, and Buyer's only source for any such recourse shall be against
the Escrow Amount in accordance with this Section 3.5. Notwithstanding
the foregoing, Nextera and Sellers acknowledge that nothing in this
Section 3.5(j) shall limit Buyer's rights under Article XI for breaches
of Nextera's and Sellers' representations and warranties contained in
Article V.
(k) Upon the expiration of the Collection Review Period,
all amounts remaining in the escrow account that are not the subject of
a formal dispute initiated in accordance with this Section 3.5 shall be
delivered by the Escrow Agent to Nextera.
Section 3.6. Accounts Receivable and Prepaid Expenses.
(a) Set forth in Schedule 3.6 is a schedule of the
accounts receivable and prepaid expenses as of June 30, 2003,
specifying the names of each account, the dates of incurrence, the face
amounts thereof and, in the case of the accounts receivable, the amount
of any reserve Sellers have allotted for each such account, if any.
(b) Buyer shall use its commercially reasonable efforts
to collect all such accounts receivable set forth on Schedule 3.6 prior
to Buyer's making of any Collectible Accounts Receivable Determination;
it being understood that Buyer's commercially reasonable efforts shall
not require Buyer to initiate litigation to collect accounts
receivable.
(c) All revenue and expenses relating to the Assets
transferred and assigned to Buyer on the Closing Date shall be prorated
as of the Closing Date, except as otherwise provided herein. Sellers
shall take commercially reasonable actions to notify third Persons who
are obligated to make payments with respect to the accounts receivable
after the Closing Date to make such payments to Buyer when due and, if
Sellers receive any payment with respect to the accounts receivable on
and after the Closing Date, including payments with respect to any
Withheld Receivables that are transferred to Buyer in accordance with
Section 3.5(d), Sellers shall promptly remit such amount to Buyer.
ARTICLE IV
CLOSING AND POST-CLOSING COOPERATION
Section 4.1. Closing. Subject to the satisfaction or waiver by the
appropriate Party of all of the conditions precedent to Closing specified in
Articles IX and X hereof, the consummation of the sale and purchase of the
Assets and the other transactions contemplated by and described in this
Agreement (the "CLOSING") shall take place at the offices of Paul, Hastings,
Xxxxxxxx & Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, on or before
December 31, 2003, unless extended to a later date by agreement of FTI and
Nextera in writing, at 10:00 a.m. local time (the "CLOSING DATE"). The Closing
shall be effective as of 11:59 p.m. on the Closing Date or at such other time as
the Parties hereto may mutually designate in writing.
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Section 4.2. Actions of Sellers at Closing.
(a) At the Closing, Sellers shall sell, convey, transfer,
assign and deliver to Buyer the Assets; and
(b) At the Closing, and unless otherwise waived in
writing by Buyer, Sellers shall deliver to Buyer the documents and
instruments required by Article IX hereof.
Section 4.3. Actions of Buyer at Closing.
(a) At the Closing, Buyer shall pay Sellers the Cash
Closing Amount, deposit the Escrow Amount in accordance with the Escrow
Agreement and pay Sellers the Medical Plan Payment, and Buyer shall
assume the Assumed Liabilities; and
(b) At the Closing and unless otherwise waived in writing
by Nextera, Buyer shall deliver the documents and instruments required
by Article X hereof.
Section 4.4. Additional Acts. From time to time after the Closing,
Sellers and Nextera shall execute and deliver such other instruments of
conveyance and transfer, and take such other actions as Buyer reasonably may
request, to convey and transfer more effectively full right, title and interest
to, vest in, and place Buyer in legal and actual possession of, any and all of
the Assets, and Buyer shall execute and deliver such other instruments, and take
such other actions as Sellers or Nextera reasonably may request, to assist
Sellers and Nextera in satisfaction of any Excluded Liabilities and repayment of
any Indebtedness. Sellers and Nextera shall furnish Buyer and Buyer shall
furnish Sellers and Nextera with such information and documents in their
possession or under their control, or which they can execute or cause to be
executed, as will enable Buyer to prosecute any and all petitions, applications,
claims and demands relating to or constituting a part of the Assets and Sellers
and Nextera to satisfy any Excluded Liabilities. Additionally, Sellers and
Nextera shall cooperate with and use their respective reasonable best efforts to
cause their respective former and present directors, managers, officers and
employees to cooperate with Buyer on and after the Closing in furnishing
information, evidence, testimony and other assistance in connection with any
action, proceeding, arrangement or dispute of any nature with respect to matters
pertaining to all periods prior to the Closing in respect of the items subject
to this Agreement as reasonably requested by Buyer. Buyer shall cooperate with
and use their respective reasonable best efforts to cause its directors,
managers, officers and employees to cooperate with Sellers and Nextera after the
Closing in furnishing information, evidence, testimony and other assistance in
connection with any action, proceeding, arrangement or dispute of any nature
with respect to Excluded Liabilities.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF NEXTERA AND SELLERS
Each of the Sellers and Nextera hereby jointly and severally represent
and warrant to Buyer and FTI as follows:
Section 5.1. Corporate Organization. Lexecon is a corporation
organized, validly existing and in good standing under the laws of the State of
Illinois. Each of Nextera, CE and
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ERG is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware. Nextera owns 100% of the issued and
outstanding capital stock of Lexecon. Lexecon owns 100% of the issued and
outstanding capital stock of each of CE and ERG. There are no outstanding
options, warrants, rights, commitments, preemptive rights or agreements of any
kind for the issuance and sale or rights convertible into additional equity of
any class or kind of Sellers. Each of the Sellers and Nextera has all requisite
corporate power and authority to own, lease and operate its properties and
conduct the Business as now being conducted. Each of the Sellers and Nextera are
duly qualified to do business and are in good standing in each jurisdiction
where the nature of the business conducted by them or the property they own,
lease or operate requires any of them to qualify to do business as a foreign
corporation except where the failure to so qualify would not have a Material
Adverse Effect. Set forth on Schedule 5.1 is a list of each jurisdiction in
which both Sellers and Nextera are qualified to do business. Except as set forth
on Schedule 5.1, none of Sellers nor Nextera has received any written notice or
assertion within the last three years from any governmental official of any
jurisdiction to the effect that any of Sellers or Nextera is required to be
qualified or otherwise authorized to do business therein, in which any of
Sellers or Nextera has not qualified or obtained such authorization. Each of the
Sellers and Nextera have previously delivered to FTI complete and correct copies
of Sellers' and Nextera's Certificates of Incorporation and all amendments
thereto as of the date hereof, and their By-laws, as in effect on the date
hereof (together, the "FORMATION DOCUMENTS"), and none of Sellers nor Nextera
are in default in the performance, observation or fulfillment of any provision
of any such Formation Documents.
Section 5.2. Authorization of Sellers.
(a) Each of the Sellers and Nextera has the full legal
right, power and all authority to enter into, execute and deliver this
Agreement, to perform fully its obligations hereunder and to consummate
the transactions contemplated hereby. Except for Nextera Stockholder
Approval, all necessary and appropriate corporate action has been taken
by Sellers and Nextera with respect to the execution and delivery of
this Agreement and the performance of their respective obligations
hereunder and no other proceedings on the part of any of Sellers or
Nextera is necessary to approve the Agreement or the other Transaction
Documents and the transactions contemplated hereby and thereby.
(b) The only vote required of the holders of any class or
series of Nextera's capital stock or other equity interests necessary
to adopt this Agreement and to approve the transactions contemplated
hereby is the approval of the holders of a majority of the voting power
of the outstanding Nextera Stock (the "NEXTERA STOCKHOLDER APPROVAL").
(c) This Agreement has been duly and validly executed and
delivered by each of the Sellers and Nextera and constitutes, and the
documents to be executed and delivered at the Closing, when executed
and delivered by each of the Sellers and Nextera, will constitute,
valid and binding obligations of Sellers and Nextera, enforceable
against each of them in accordance with their terms, subject to
enforceability against Buyer and FTI and the effect of applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting creditors' rights generally and subject to the effect of
general principles of equity, including, without limitation, the
possible unavailability of specific
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performance or injunctive relief, regardless of whether considered in a
proceeding in equity or at law.
Section 5.3. Financial Statements.
(a) The annual consolidated financial statements of
Nextera set forth in its most recent Form 10-K filing with the SEC and
the interim consolidated financial statements of Nextera set forth in
filings with the SEC since the filing of its most recent Form 10-K,
along with the following financial statements of the Business, which
have been previously furnished to Buyer by Nextera are true, correct
and complete in all material respects, have been prepared from and are
in accordance with the books and records of Sellers and Nextera and its
subsidiaries and have been prepared in conformity with GAAP applied
using an accrual basis method, and fairly present the financial
condition of Sellers and the Business as of the dates stated and the
results of operations and cash flows of Sellers and the Business for
the periods then ended in accordance with such practices: (i) the
audited balance sheet of Lexecon as of December 31, 2002, and the
related consolidated statements of operations, cash flow and
stockholders' equity of Sellers for the year then ended, (ii) the
audited balance sheet of Nextera as of December 31, 2001, and 2002, and
the related consolidated statements of operations, cash flow and
stockholders' equity of Nextera for the years then ended (the "ANNUAL
FINANCIAL STATEMENTS"), and (iii) the unaudited balance sheet of
Sellers as of June 30, 2003 attached hereto as Schedule 5.3 (the "JUNE
BALANCE SHEET"), and the related statement of operations for the
six-month period then ended. The June Balance Sheet for the Business
represents Sellers' and Nextera's best estimate of the assets and
liabilities of the Business to be transferred to Buyer pursuant to this
Agreement and fairly presents in all material respects the financial
position of such Business as of June 30, 2003, and was prepared in all
material respects from and is in accordance with the books and records
of Sellers, Nextera and its subsidiaries and was prepared in accordance
with GAAP using an accrual basis method other than footnotes required
by GAAP and year-end audit adjustments. There are no material
liabilities or obligations, whether contingent or absolute, direct or
indirect, or matured or unmatured, of the Business which are not shown
or provided for in the June Balance Sheet.
Section 5.4. Absence of Certain Changes or Events. Except as set
forth on Schedule 5.4, since the Balance Sheet Date, there has not been any
material adverse effect on the business, operations, results of operations,
assets, properties or financial condition of the Business; excluding (i) the
failure of any of the employees of Sellers other than those listed on Schedule
7.6 to accept employment with the Buyer or FTI or (ii) the effect of any
delisting of the capital stock of Nextera from the Nasdaq SmallCap Stock Market
("MATERIAL ADVERSE EFFECT"). Nextera has not declared, set aside or paid any
dividend or other distribution (whether in cash, securities or property or any
combination thereof) in respect of any class, redemption or series of its
capital stock or other equity interests. In addition to the foregoing, none of
Sellers nor Nextera have:
(a) authorized or issued capital stock of Sellers or
Nextera; granted any stock option or right to purchase shares of
capital stock of Sellers or Nextera; issued any security convertible
into such capital stock; granted of any registration rights; purchased,
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redeemed, retired, or otherwise acquired, by Sellers or Nextera, any
shares of any such capital stock; or declared or paid any dividend or
other distribution in respect of shares of such capital stock;
(b) (i) sold, leased, transferred or disposed of any
material assets or rights or (ii) acquired or leased any material
assets or rights;
(c) paid, discharged or satisfied any material liability,
obligation or lien with respect to underlying obligations, other than
payment, discharge or satisfaction of (i) Indebtedness as it matured
and became due and payable; (ii) liabilities, obligations or liens in
the ordinary course of business consistent with past practice; or (iii)
as otherwise specifically contemplated by this Agreement;
(d) materially (i) changed any of the accounting or tax
principles, practices or methods or (ii) changed reserve policies or
reserves;
(e) (i) made any change in the compensation payable to
any of its officers, directors, employees, consultants, agents or sales
associates (other than general increases in wages to employees and/or
payments to consultants, agents or sales associates in the ordinary
course consistent with past practice), (ii) entered into or amended any
material employment, severance, consulting, termination, other
agreement or (iii) made any material change in its existing borrowing
or lending arrangements for or on behalf of any of such Persons
pursuant to an employee benefit plan or otherwise;
(f) (i) paid or made any accrual or arrangement for
payment of any pension, retirement allowance, unused vacation days or
other employee benefit to any officer, director, employee, sales
associate or affiliate, except payments and accruals made in the
ordinary course consistent with past practice; (ii) adopted or paid,
granted, issued, accelerated or accrued salary or other payments or
benefits which include any payment in equity or cash payments pursuant
to any pension, profit-sharing, bonus, extra compensation, incentive,
deferred compensation, stock purchase, stock option, stock appreciation
right, group insurance, severance pay, retirement or other employee
benefit plan, agreement or arrangement, or any employment or consulting
agreement except, in each case, in the ordinary course; or (iii)
amended in any material respect any such existing plan, agreement or
arrangement in a manner inconsistent with the foregoing;
(g) made any borrowing or agreement to borrow funds by
Sellers or incurred any other obligation or liability, contingent or
otherwise, which would remain as a liability of the Business following
the Closing, except liabilities reflected on the June Balance Sheet; or
any endorsement, assumption or guarantee of payment or performance of
any loan or obligation of any other individual, firm, corporation or
other entity which would remain as a liability of the Business
following the Closing, except as reflected on the June Balance Sheet;
(h) made any mortgage, pledge, lien, security interest,
hypothecation, charge or other encumbrance with respect to the Assets;
- 15 -
(i) made any material write downs of the value of any
Asset or any material write downs as uncollectible of any accounts
receivable or portion thereof;
(j) made any payments (other than compensation in the
ordinary course consistent with past practice), loans, advances or
other distributions to, or entered into any transaction, agreement or
arrangement with, any affiliates, officers, directors, employees, sales
associates, stockholders or their respective affiliates;
(k) made or authorized any capital expenditures, except
in the ordinary course consistent with past practice or not in excess
of Twenty-Five Thousand Dollars ($25,000) individually or One Hundred
Thousand Dollars ($100,000) in the aggregate;
(l) settled or compromised any material Tax liability or
agreed to any adjustment of any material Tax attribute or made any
election with respect to Taxes;
(m) made any material change in its working capital
practices generally, including accelerating any collections of cash or
accounts receivable or deferring payments or accruals;
(n) incurred any material liability other than in the
ordinary course of business;
(o) had a judgment entered or settled any Litigation
resulting in a loss, payment or other cost, after receipt of insurance
payments, individually or in the aggregate, in excess of Twenty-Five
Thousand Dollars ($25,000);
(p) amended Sellers' or Nextera's Formation Documents or
altered through merger, liquidation, reorganization, restructuring or
in any other fashion its respective corporate structure or ownership;
(q) made any modification, waiver, change, amendment,
release, rescission or termination of, or accord and satisfaction with
respect to, any material contract, agreement, license or other
instrument to which Sellers are a party, including all material
customer/consulting agreements, other than any satisfaction by
performance in accordance with the terms thereof in the ordinary course
of business;
(r) entered into or amended in an adverse manner any
agreement which had non-competition, geographical restriction or
similar covenants that would be material; or
(s) agreed to take any of the foregoing actions other
than as permitted hereunder or any action which would reasonably be
expected to prevent or delay the consummation of the transactions
contemplated by this Agreement.
Section 5.5. Undisclosed Liabilities. Except for the Assumed
Liabilities or as set forth on Schedule 5.5, there is no Liability which will
become a Liability of Buyer following the Closing, except:
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(a) those set forth or reflected in the June Balance
Sheet which have not been paid or discharged since the date thereof;
(b) those arising under agreements or other commitments
to be expressly assumed by Buyer at the Closing; and
(c) those arising in the ordinary course of the Business
since the date of the June Balance Sheet.
Section 5.6. Taxes. Except as set forth on Schedule 5.6:
(a) Each of the Sellers and Nextera has duly filed all
Tax Returns required to be filed with respect to Sellers for all
taxable periods or portions thereof ending on or before the Closing
Date with the appropriate Governmental Authority. All such Tax Returns
are true, correct and complete in all material respects.
(b) All Taxes shown as due on such Tax Returns or
otherwise due and payable and all assessments received by Sellers or
Nextera have been paid or properly accrued to the extent such Taxes
have become due and payable except to the extent any such Taxes or
assessments are being contested in good faith by appropriate
proceedings.
(c) On the June Balance Sheet, reserves and allowances
have been provided, and on the books and records of Sellers and Nextera
reserves and allowances will be provided, in each case adequate to
satisfy all liabilities for Taxes relating to Sellers for periods
through the Closing Date (without regard to deferred Taxes and without
regard to the materiality thereof).
(d) There are no waivers or agreements by Sellers or
Nextera extending the statute of limitations for any period with
respect to any Tax to which Sellers may be subject.
(e) None of the federal, state or local income Tax
Returns filed by or with respect to any of Sellers or Nextera during
the prior three years has been audited by any taxing authority.
Schedule 5.6 sets forth the dates and results of all such audits.
Neither the IRS nor any other Governmental Authority has asserted, or
to the Knowledge of Sellers or Nextera, threatened to assert any
deficiency or claim for additional Taxes against, or any adjustment of
Taxes relating to, Sellers or Nextera.
(f) There are no material Tax liens on any assets of
Sellers other than liens for current Taxes not yet due and payable and
liens for Taxes that are being contested in good faith by appropriate
proceedings.
(g) Each of the Sellers and Nextera has withheld or
collected and paid over to the appropriate Governmental Authorities or
are properly holding for such payment all material Taxes required by
law to be withheld or collected.
(h) There are no Tax sharing agreements or similar
arrangements with respect to or involving Sellers or Nextera.
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Section 5.7. Compliance With Law. Each of the Sellers and Nextera
has complied and is in compliance with all material applicable laws, statutes,
orders, rules, regulations, policies or guidelines promulgated, or material
judgments, decisions or orders entered, by any federal, state, local or foreign
court or Governmental Authority or instrumentality relating to the Business
(collectively, the "APPLICABLE LAWS"). Schedule 1.1(f) contains a complete and
accurate list of all Permits issued to or held by Sellers or Nextera which are
related to the Business. Each of the Permits is currently valid and in full
force and effect and the Permits constitute all franchises, licenses, permits,
consents, authorization, approvals, and certificates of any regulatory,
administrative or other agency or body necessary to conduct the Business as
presently conducted, except where any such failure would not result in a
Material Adverse Effect. None of Sellers nor Nextera is in material violation of
any of the Permits and there is no pending or threatened action or proceeding
which could result in the revocation, cancellation or inability of Sellers or
Nextera to renew or transfer any Permit, except where any such violation would
not result in a Material Adverse Effect. Except as set forth on Schedule 5.7,
none of Sellers nor Nextera, nor any of their affiliates, to the Knowledge of
Sellers and Nextera, is under investigation with respect to, or has been charged
with or given notice of any violation of, any of the Applicable Laws.
Section 5.8. Proprietary Rights.
(a) Schedule 1.1(g) sets forth: (i) all registered Marks
and pending applications for registration of any Xxxx owned by Sellers;
(ii) all Patents and applications for Patents owned by Sellers; (iii)
all registered Copyrights and pending applications for registration of
any Copyrights owned by Sellers; and (iv) all proprietary Software
owned by Sellers that are material to the operation of the Business as
presently conducted (collectively, "OWNED INTELLECTUAL PROPERTY").
Except as set forth on Schedule 5.8, Sellers are the sole and exclusive
owner of all right, title and interest in the Owned Intellectual
Property free and clear of all Encumbrances whatsoever.
(b) Except as set forth on Schedule 5.8, to the Knowledge
of Sellers and Nextera, other than those Proprietary Rights listed on
Schedule 1.1(g), no Proprietary Right is used in or is necessary for
the operation of the Business as the same is currently conducted. To
the Knowledge of Sellers and Nextera, the Business, as conducted prior
to the Closing, and the sale by Sellers, and ownership by Buyer of any
of the Assets, was not, is not and will not be in contravention of any
trade name, service xxxx, patent, trademark, copyright or other
proprietary right of any third party.
(c) Except as set forth on Schedule 5.8, none of the
Proprietary Rights has been hypothecated, sold, assigned or licensed by
any of Sellers or Nextera. To the Knowledge of Sellers and Nextera, no
Proprietary Right of Sellers is subject to challenge, claims of
infringement, unfair competition or other claims, and no Proprietary
Right of Sellers is being infringed upon or violated by any person,
firm, corporation or other legal entity.
(d) Except in the ordinary course of business or as set
forth on Schedule 5.8; neither Sellers nor Nextera has given any
indemnification against patent, trademark or copyright infringement as
to any equipment, materials, products, services or supplies which
either Sellers or Nextera produces, uses, licenses or sells, which
indemnification
- 18 -
will be assumed by Buyer; to the Knowledge of Sellers or Nextera, no
product, process, method or operation presently sold, engaged in or
employed by Sellers or Nextera in connection with the Business
infringes upon any rights owned by any other person, firm, corporation
or other legal entity; to the Knowledge of Sellers or Nextera, there is
not pending or threatened any claim or Litigation against any of the
Sellers or Nextera contesting the right of any of the Sellers or
Nextera to sell, engage in or employ with respect to the Business any
such product, process, method, or operation; and there is not, to the
Knowledge of Sellers and Nextera, pending, proposed or threatened, any
patent, copyright, trade name, trademark, service xxxx, invention,
device, application or principle which, if granted, reasonably could be
expected to result in, or which has, a Material Adverse Effect.
Section 5.9. Insurance. Schedule 5.9 is a true, correct and
complete list of all insurance policies and bonds in force that are related to
the Business in which any of Sellers or Nextera is named as an insured party, or
for which any of Sellers or Nextera has paid any premiums, and Schedule 5.9
correctly states the name of the insurer, type and amount of coverage,
deductible amounts, if any, expiration date and amount of premium paid annually
for each such policy or bond. Except as disclosed on said Schedule, all such
policies or bonds are currently in full force and effect and none of Sellers nor
Nextera has received any notice from any such insurer with respect to the
cancellation of any such insurance. Sellers and Nextera will continue all of
such insurance in full force and effect up to the Closing. All premiums due and
payable on such policies have been paid. Except as disclosed on said Schedule,
none of Sellers nor Nextera is a co-insurer or self-insurer under any term of
any insurance policy. The policies listed on Schedule 5.9 as "occurrence"
provide coverage on an "occurrence basis" which includes any "occurrence"
arising from Sellers' operations up to and through the Closing. With respect to
policies listed as "claims made" Sellers or Nextera is provided coverage, and
for the period of any "tail coverage" purchased by Sellers or Nextera claims can
be brought for wrongful acts occurring during the period Sellers were
subsidiaries of Nextera.
Section 5.10. Bank Accounts, Depositories, Powers of Attorney.
Schedule 5.10 is a true, correct and complete list of the names and locations of
all banks or other depositories in which are located cash or cash equivalents of
Sellers, and the names of the persons authorized to draw on any accounts, borrow
therefrom or have access thereto. No person or entity holds a power of attorney
of Sellers.
Section 5.11. Title to Properties.
(a) Except as set forth on Schedule 5.11, Sellers have
good, valid and marketable title to the Assets owned by Sellers and
good title to the Assets not owned by Sellers, in each case, that are
used in the Business or reflected on the June Balance Sheet other than
items of personal property which in the aggregate had a book value not
in excess of Twenty-Five Thousand Dollars ($25,000) which have been
disposed of in the ordinary course of business since June 30, 2003.
(b) The Assets constitute all of the property now used in
and necessary for the conduct of the Business as presently conducted.
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(c) Except as set forth on Schedule 5.11, all such Assets
are held free and clear of all Encumbrances. Except as set forth on
Schedule 5.11, no financing statement covering any of the Assets as
collateral under the Uniform Commercial Code or similar law naming
Sellers or Nextera as debtor has been filed in any jurisdiction, and
none of Sellers nor Nextera is a party to or, to the Knowledge of
Sellers and Nextera, bound under any agreement or legal obligation
authorizing any party to file any such financing statement.
(d) Except as set forth on Schedule 5.11 or as would not
result in a Material Adverse Effect, each of Sellers and Nextera
conducts the Business in compliance with any Real Property Leases,
leases or other Contracts, any restrictions of record and all zoning,
fire, safety, building, pollution, environmental control and other
laws, ordinances, regulations and requirements of every Governmental
Authority applicable to the ownership, operation or other use of the
Assets.
Section 5.12. Brokers, Finders. The transactions contemplated
herein were not submitted to Sellers or Nextera by any broker or other person
entitled to a commission or finder's fee thereon. None of Sellers nor Nextera
nor any of their officers, directors, managers, shareholders, or employees, has
engaged any broker or finder or incurred or taken any action which may give rise
to any liability against itself or the Assets for any brokerage fees,
commissions, finders' fees or similar fees or expenses and no broker or finder
has acted directly or indirectly for Sellers or Nextera in connection with this
Agreement or the transactions contemplated hereby. Except for payments to
Xxxxxxxx Valuation Advisors for its rendering of (i) an opinion as to the
fairness of the transaction contemplated hereby from a financial point of view
and (ii) a solvency/fair value opinion, and to Harch Capital Management for its
investment banking services, no investment banking, financial advisory or
similar fees have been incurred or are or will be payable by Sellers or Nextera
in connection with this Agreement or the transactions contemplated hereby.
Section 5.13. Legal Proceedings, etc. Except as set forth on
Schedule 5.13, there is no Litigation filed, pending or, to the Knowledge of
Sellers and Nextera, threatened against Sellers or Nextera and involving the
Assets or the Business, this Agreement or the transactions contemplated hereby,
before any Governmental Authority. Except as set forth on Schedule 5.13, none of
Sellers nor Nextera is subject to any judgment, order or decree, or, to the
Knowledge of Sellers and Nextera, any governmental restriction applicable to
Sellers and Nextera, which reasonably could be expected to result in, or which
has, a Material Adverse Effect.
Section 5.14. No Conflict or Default; Consents.
(a) Except as set forth on Schedule 5.14, neither the
execution and delivery of this Agreement by Sellers or Nextera, nor
compliance by Sellers or Nextera with the terms and provisions hereof,
including, without limitation, the consummation of the transactions
contemplated hereby, will violate any statute, regulation or ordinance
of any Governmental Authority applicable to Sellers and Nextera, or
conflict with or result in the breach of or the acceleration of any
term, condition or provision of the Formation Documents of any of
Sellers or Nextera or of any material agreement, deed, contract,
mortgage, indenture, writ, order, decree, legal obligation or
instrument to which any of
- 20 -
Sellers or Nextera is a party or by which Sellers or Nextera or any of
the Assets are bound, or constitute a default (or an event which, with
the lapse of time or the giving of notice, or both, would constitute a
default) thereunder, or result in the creation or imposition of any
Encumbrance with respect to any of the Assets, or give to others any
interest or rights, including, without limitation, rights of
termination, acceleration or cancellation in or with respect to the
Assets or the Business.
(b) Except for the Nextera Shareholder Approval or as set
forth on Schedule 1.3, the execution and delivery of this Agreement by
Sellers and Nextera and the consummation of the transactions
contemplated herein, do not require Sellers or Nextera to obtain the
consent, approval or action of, or to make any filing with or provide
any notice to, any Person or Governmental Authority.
Section 5.15. Labor Relations.
(a) Schedule 5.15 contains a list of all individuals who
on the date hereof perform services in the Business operations of
Sellers and Nextera in the capacity of an employee or independent
contractor as well as the job classification and principal work
location for each such individual. Except as set forth on Schedule
5.15, no such individual has terminated his or her employment or
engagement, nor, to the Knowledge of Sellers or Nextera, plans not to
continue his or her employment or engagement with Sellers or Nextera
after the date hereof. Schedule 5.15 also contains a list as of the
date hereof of all individuals who formerly performed services in the
Business operations of Sellers and Nextera in the capacity of an
employee or independent contractor and whose employment or engagement
terminated on or after January 1, 2003.
(b) None of Sellers nor Nextera is a party to any
collective bargaining agreement or agreement of any kind with any union
or labor organization, no such agreement is currently being negotiated
on behalf of Sellers or Nextera, and, to the Knowledge of Sellers or
Nextera, there is no effort by or on behalf of any labor union to
organize any employees of the Business for purposes of collective
bargaining. Solely to the extent relating to the employees of the
Business, (i) there is no strike, labor dispute, work shutdown or work
stoppage actually pending, or to the Knowledge of Sellers or Nextera,
threatened, against Sellers or Nextera with respect to the Business,
(ii) no collective bargaining grievance is pending or, to the Knowledge
of Sellers or Nextera, threatened against Sellers or Nextera or any
other entity with respect to the Business, and (iii) none of Sellers
nor Nextera is the subject of any Litigation which is pending or, to
the Knowledge of Sellers or Nextera, threatened, asserting that Sellers
or Nextera have committed an unfair labor practice (within the meaning
of the National Labor Relations Act or any applicable law) or seeking
to compel Sellers or Nextera to bargain with any labor organization as
to wages and conditions of employment.
(c) Sellers and Nextera have complied in all material
respects with all applicable federal, state and local laws, rules,
regulations and executive orders relating to employment, including, but
not limited to, the National Labor Relations Act, as amended; Title VII
of the Civil Rights Act of 1964, as amended; the Reconstruction Civil
Rights Acts, as amended; the Equal Pay Act of 1963, as amended; the Age
Discrimination in
- 21 -
Employment Act of 1967, as amended; the Rehabilitation Act of 1973, as
amended; the Selective Service Act of 1948, as amended; the Veterans'
Re-employment Rights Acts, as amended; the Vietnam Era Veterans
Readjustment Act of 1974, as amended; the Fair Labor Standards Act, as
amended; the Occupational Safety and Health Act of 1970, as amended;
the Immigration Reform and Control Act of 1986 and the regulations
promulgated pursuant thereto; the Worker Adjustment and Retraining
Notification Act, as amended ("WARN") and all applicable laws, rules
and regulations governing payment of minimum wages and overtime rates,
the withholding and payment of taxes from compensation of employees and
the payment of premiums and/or benefits under applicable worker
compensation laws.
(d) Except as set forth on Schedule 5.15, there (i) is no
outstanding, pending, or to the Knowledge of Sellers or Nextera,
threatened, claim in excess of Ten Thousand Dollars ($10,000)
individually or Twenty-Five Thousand Dollars ($25,000) in the aggregate
against Sellers, Nextera or the Business by any individual who is a
current or former employee or independent contractor of the Business,
(ii) is no dispute between Sellers or Nextera and a number or class of
any individuals who are current or former employees or independent
contractors of the Business which has had or would reasonably be
expected to have a Material Adverse Effect or materially impair the
ability of Buyer to carry on the Business as currently conducted and
(iii) there are no material payments of compensation in excess of Fifty
Thousand Dollars ($50,000) due but unpaid to any individual who is a
current or former employee or independent contractor of the Business.
Section 5.16. Employee Benefit Plans; ERISA.
(a) Schedule 5.16 contains a true, current and complete
list of all Seller Plans for any of the current or former employees,
officers, non-employee directors or consultants of Sellers. For
purposes of this Agreement, "Seller Plans" shall mean (i) all employee
benefit plans within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), (ii) each
supplemental retirement, severance, sabbatical, medical, dental, vision
care, disability, employee relocation, cafeteria benefit (Section 125
of the Code) or dependent care (Section 129 of the Code), life
insurance or accident insurance plans, programs or arrangements, (iii)
each bonus, pension, profit sharing, savings, deferred compensation or
incentive plans programs or arrangements, (iv) each other fringe or
employee benefit plan, program or arrangement that applies to senior
management and that does not generally apply to all employees and (v)
each employment, retention or severance agreement that, in any case of
(i) through (v) above, written or otherwise, are sponsored or
maintained by Sellers, Nextera or any trade or business (whether or not
incorporated) which is treated as a single employer with Sellers within
the meaning of Section 414(b), (c), (m) or (o) of the Code (an "ERISA
AFFILIATE") for any of their current or former employees, officers,
non-employee directors or consultants.
(b) Sellers have provided to Buyer a true and complete
copy of (i) each Seller Plan listed on Schedule 5.16, including
(without limitation) all material amendments thereto and related trust
documents, administrative services agreements, group annuity
- 22 -
contracts and group insurance contracts, (ii) with respect to any such
Seller Plan intended to qualify under Section 401(a) of the Code, the
most recent favorable determination or opinion letter from the Internal
Revenue Service with respect to such Seller Plan's qualified status
under Code and (iii) all current summary plan descriptions, summaries
of material modifications and material communications relating to each
such Seller Plan.
(c) None of the Seller Plans is (i) subject to Title IV
or Section 302 of ERISA or Section 412 or 4971 of the Code, (ii) a
"MULTIEMPLOYER PLAN" as defined in Sections 3(37) and 4001(a)(3) of
ERISA or (iii) an employee pension benefit plan, within the meaning of
Section 3(2) of ERISA that has two or more contributing sponsors at
least two of whom are not under common control, within the meaning of
Section 4063 of ERISA (a "MULTIPLE EMPLOYER PLAN"). Sellers, Nextera
and any ERISA Affiliate have not incurred any liability under Title IV
of ERISA that could become, after the Closing Date, an obligation of
Buyer. No liability to the Pension Benefit Guaranty Corporation has
been incurred by Sellers, Nextera or any ERISA Affiliate since the
effective date of ERISA. No event has occurred with respect to any
Seller Plan that has been established, maintained or contributed to at
any time during the five-year period immediately preceding the Closing
Date which could result in liability to Buyer under Section 4069 of
ERISA.
Section 5.17. Contracts and Commitments.
(a) Except for Excluded Assets, Schedule 5.17 lists all
material Contracts used in or relating to the Business.
(b) Sellers have delivered true complete and correct
copies of all written Contracts listed on Schedule 5.17 to Buyer prior
to the date hereof.
(c) Except for Excluded Assets and the Real Property
Leases and Personal Property Leases listed on Schedules 1.1(a) and
1.1(h) respectively, the Contracts constitute all of the contracts,
agreements, contract rights, leases, license agreements, franchise
rights and agreements, policies, purchase and sales orders, quotations
and executory commitments, instruments, guaranties, indemnifications,
arrangements and understandings (written or oral) necessary to conduct
the Business as presently conducted.
(d) To the Knowledge of Sellers and Nextera, all of the
Contracts are valid and binding, in full force and effect and
enforceable in accordance with their respective provisions, subject to
enforceability against the other party thereto and the effect of
applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject to the
effect of general principles of equity, including, without limitation,
the possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity or
at law.
(e) Except as set forth on Schedule 5.17, none of Sellers
nor Nextera has assigned, mortgaged, pledged, Encumbered, or otherwise
hypothecated any of its right, title or interest under any Contract.
- 23 -
(f) Except as set forth in Schedule 5.17, none of Sellers
nor Nextera (nor, to the Knowledge of Sellers and Nextera, any other
party thereto) is in violation of, in default in respect of nor has
there occurred an event or condition which, with the passage of time or
giving or notice (or both) would constitute a violation or default of
any Contract, and, to the Knowledge of Sellers and Nextera, there are
no facts or circumstances which would reasonably indicate that Sellers
or Nextera (or any other party) will be or may be in violation of or in
default in respect of any Contract, subsequent to the date hereof.
Except as set forth in Schedule 5.17, no notice has been received by
Sellers or Nextera claiming any such default by Sellers or Nextera or
indicating the desire or intention of any other party thereto to amend,
modify, rescind or terminate the same.
Section 5.18. Receivables; Payables.
(a) All Receivables shown on the June Balance Sheet and
all such receivables held by Sellers on the date hereof were and are
valid obligations of the respective makers thereof arising from
services actually performed by Sellers in the ordinary course of
business, and were not and are not subject to any offset or
counterclaim, except for amounts reserved against on the June Balance
Sheet (which reserves are adequate and calculated consistent with past
practice, and will not represent a material adverse change in the
composition of such receivables in terms of aging) and, with respect to
notes and accounts thereafter arising and outstanding on the date
hereof, except for a percentage thereof equal to the percentage which
said reserved amounts on the June Balance Sheet constituted of the
aggregate of notes and accounts receivable at the date of the June
Balance Sheet.
(b) Schedule 3.6 contains an accurate and complete list,
as of a date no earlier than June 30, 2003, of all of the Receivables,
together with detailed information as to each such Receivable which has
been outstanding for more than thirty (30) days. Except as set forth on
Schedule 3.6, none of Sellers nor Nextera have any Knowledge that any
account debtors of Sellers are unable to pay any accounts receivable
owed to Sellers for any reason whatsoever, except to the extent of any
amounts reserved against on the June Balance Sheet.
(c) Except as set forth on Schedule 5.18, as of a date no
earlier than June 30, 2003, Sellers have paid all accounts payable in
the ordinary course of business in accordance with the terms thereof,
and has not delayed the payment thereof in contemplation of the
transactions provided in the Agreement or otherwise.
Section 5.19. Books of Account; Records. The general ledgers, books
of account, stock record books, minute books and other records of Sellers and
Nextera related to the Business are complete and correct in all material
respects, have been maintained in accordance with good business practices and
the matters contained therein are appropriately and accurately reflected in the
Financial Statements.
Section 5.20. Officers, Employees and Compensation. Except as set
forth on Schedule 5.20, to the extent the following constitute Assumed
Liabilities, the provisions for
- 24 -
wages and salaries accrued on the Annual Financial Statements and any
liabilities therefor reflected on the June Balance Sheet are adequate for
salaries and wages, including accrued vacation pay, for the period up through
the date thereof, and Sellers and Nextera have accrued on their books and
records all obligations for wages and salaries and other compensation to their
employees, including, but not limited to, vacation pay and sick pay, and all
commissions and other fees payable to independent contractors, agents, salesmen
and representatives. Except as set forth on Schedule 5.20 or under the Seller
Plans or the Non-Compete Agreements, none of Sellers nor Nextera has become
obligated, directly or indirectly, to any shareholder, director, officer, member
or manager of any of Sellers or any member of their families, except for current
liability for such compensation reflected on the June Balance Sheet. Except as
set forth on Schedule 5.20, no shareholder, director, officer, member, or
manager, agent or employee of Sellers holds any position or office with or has
any material financial interest, direct or indirect, in any supplier, customer
or account of, or other outside business which has material transactions with
Sellers or Nextera.
Section 5.21. Real Property Leases. Schedule 1.1(a) lists each real
property lease used by Sellers in the operation of the Business under which any
of Sellers or Nextera is a lessee. True copies of such Real Property Leases
(including all amendments thereof and modifications thereto) have been delivered
to Buyer prior to the date hereof. All such Real Property Leases are valid and
binding and in full force and effect, subject to enforceability against the
other party and the effect of applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights generally and subject to
the effect of general principles of equity, including, without limitation, the
possible unavailability of specific performance or injunctive relief, regardless
of whether considered in a proceeding in equity or at law. Except as set forth
on Schedule 5.21, none of Sellers nor Nextera (nor, to the Knowledge of Sellers
or Nextera, any other party thereto) is in violation of, in default in respect
of nor has there occurred an event or condition which, with the passage of time
or giving of notice (or both) would constitute a default of any such Real
Property Lease. Sellers do not own any real property.
Section 5.22. Personal Property Leases. Schedule 1.1(h) is a
complete and accurate list of each Personal Property Lease used by Sellers in
the operation of the Business under which any of Sellers or Nextera is a lessee.
To the Knowledge of Sellers and Nextera, all of such Personal Property Leases
are valid and binding, in full force and effect and enforceable in accordance
with their respective provisions, subject to enforceability against the other
party thereto and the effect of applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights generally and
subject to the effect of general principles of equity, including, without
limitation, the possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity or at law.
Except as set forth on Schedule 5.22, none of Sellers nor Nextera (nor, to the
best Knowledge of Sellers or Nextera, any other party thereto) is in violation
of, in default in respect of nor has there occurred an event or condition which,
with the passage of time or giving of notice (or both) would constitute a
default of any such Personal Property Lease.
Section 5.23. Environmental Matters. Except as set forth on
Schedule 5.23, to the Knowledge of Sellers and Nextera, (i) there are no
conditions at, in, on, under or related to the real property leased under the
Real Property Leases (the "LEASED REAL PROPERTY") which pose a hazard to human
health or the environment other than such conditions which are in compliance
- 25 -
with applicable Environmental Laws, (ii) Sellers and Nextera are in compliance
with all applicable Environmental Laws, and Sellers and Nextera are not engaged
in the production, use, treatment, storage, transportation, handling discharge,
disposal, arrangement for disposal or release or threatened release of any
Hazardous Substance or Solid Waste in violation of applicable Environmental Law
(a) at, in, on, under, from, or over the Leased Real Property, or (b) into or
upon or over soil, surface water or groundwater at, on, or under the Leased Real
Property, (iii) during Sellers' or the Nextera's lease thereof, Sellers and
Nextera have not been responsible for the creation of any underground tanks,
collection dumps or pits, land disposal facilities or surface impoundments at,
on or under the Leased Real Property and (iv) during Sellers' or Nextera's lease
thereof, Sellers and Nextera have not been responsible for the incorporation of
asbestos containing material, radon or PCB-containing electrical transformers or
other equipment or machinery which contains or has contained PCBs, at, on, or
under the Leased Real Property, in violation of applicable Environmental Laws.
Section 5.24. Complete Disclosure. No representation or warranty
made by Sellers or Nextera in this Agreement, and no exhibit, schedule,
statement, certificate, financial statement or projection or other writing
furnished to Buyer by or on behalf of Sellers or Nextera, pursuant to this
Agreement or in connection with the transactions contemplated hereby or thereby,
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
herein and therein not misleading. Sellers have furnished or caused to be
furnished to Buyer or its representatives for review complete and correct copies
of all agreements and documents set forth on the disclosure schedules attached
hereto. None of Sellers nor Nextera has Knowledge of any fact that has any
specific application to Sellers and/or Nextera that may have a Material Adverse
Effect which has not been set forth in this Agreement or in the schedules
hereto.
Section 5.25. Agreements and Transactions with Related Parties.
Except as set forth on Schedule 5.25, neither Sellers nor Nextera is or has been
a party to any Contract related to the Assets with, or any other commitment to
(i) any party owning, beneficially or of record, directly or indirectly, any of
the capital stock of Sellers, (ii) any person related by blood, adoption or
marriage to any such party, (iii) any director or officer of any of Sellers or
Nextera, (iv) any corporation or other entity in which any of the foregoing
parties has, directly or indirectly, at least a five percent (5%) beneficial
interest in the capital stock or other type of equity interest in such
corporation or (v) any partnership in which any such party is a general partner
(any or all of the foregoing being herein referred to as "RELATED PERSONS").
Without limiting the generality of the foregoing, except as set forth on
Schedule 5.25, (A) no Related Person directly or indirectly owns or controls any
Assets or properties which are or have been used in the Business and (B) no
Related Person directly or indirectly engages in or has any significant interest
in or connection with any business (x) which is or which within the last two
years has been a competitor, customer or supplier of Sellers or has done
business with Sellers, or (y) which provides services which are similar or
related to Sellers' services.
Section 5.26. Clients and Customers.
(a) Schedule 5.26 contains (A) a true and complete list
of the clients and customers of the Business for the year then ended
December 31, 2002 and for the five (5) month period ended May 31, 2003;
provided that such Schedule may list only one client
- 26 -
in any joint-representation engagement and (B) the name of the employee
principally responsible for providing services to and, if different,
billing each such client and customer to whom the Business provided
services during 2002 and 2003.
(b) Schedule 5.26 contains (A) a true and complete list
of all written contracts, agreements, retainers and accepted proposal
letters pursuant to which the Business was actively rendering services
to its clients and customers as of July 31, 2003 (the "CLIENT
CONTRACTS") in excess of Fifty Thousand Dollars ($50,000) and (B) a
true and correct description of (x) any and all disputes or defaults
arising under or with respect to the Client Contracts in connection
with which a client or customer has threatened, or is expected to,
terminate its contract with Sellers or claim for Damages, and (y) all
loans or advances made by Sellers to or on behalf of clients and
customers of the Business, which description includes the date of such
loan or advance and the principal balance of outstanding as of the date
of this Agreement under each such loan or advance. To the Knowledge of
Sellers and Nextera, no client or customer of the Business has
threatened to terminate, fail to renew or adversely modify any
relationship with the Business.
(c) There are no existing or, to the Knowledge of Sellers
or Nextera, threatened service liability, warranty or other similar
claims, against Sellers for services which are defective or fail to
meet any service warranties. Except as set forth on Schedule 5.26,
since December 31, 2001, Sellers have not recorded any renegotiation or
price redetermination of any Business transaction in an amount in
excess One Hundred Thousand Dollars ($100,000).
Section 5.27. Work-In-Process. Schedule 5.27 contains a true aged
list of work-in-process related to the Business as of July 31, 2003, all of
which are appropriately valued and are billable and collectible in the ordinary
course of business.
Section 5.28. Solvency.
(a) None of Sellers nor Nextera is now insolvent and will
not be rendered insolvent by the transactions contemplated by this
Agreement. As used in this section, "insolvent" means that the sum of
the Liabilities of Sellers or Nextera, as the case may be, exceeds the
present fair market value of Sellers' or Nextera's assets, as the case
may be.
(b) Immediately after giving effect to the consummation
of the transactions contemplated by this Agreement: (i) each of Sellers
and Nextera will be able to pay its Liabilities as they become due in
the ordinary course of its business; (ii) each of Sellers and Nextera
will not have unreasonably small capital with which to conduct its
present or proposed business; and (iii) taking into account all pending
and threatened Litigation, final judgments against Sellers or Nextera
in actions for money damages are not reasonably anticipated to be
rendered at a time when, or in amounts such that, Sellers or Nextera
will be unable to satisfy any such judgments in accordance with their
terms (taking into account the maximum probable amount of such
judgments in any such actions and the earliest reasonable time at which
such judgments might be rendered) as well as all other obligations of
Sellers or Nextera.
- 27 -
Section 5.29. No Other Representations. EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE V, SELLERS AND NEXTERA
MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WRITTEN OR ORAL.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER AND FTI
Buyer and FTI hereby jointly and severally represent and warrant to
Sellers and Nextera that:
Section 6.1. Organization.
(a) FTI is a corporation duly formed and validly existing
and in good standing under the laws of the State of Maryland and has
all requisite corporate power and lawful authority to (i) enter into
this Agreement and to perform its obligations hereunder, (ii) own,
lease and operate its properties and assets as they are now owned,
leased and operated, and (iii) carry on its business as now conducted
and presently proposed to be conducted. Except as set forth on Schedule
6.1, FTI is not qualified to conduct business in any jurisdiction
outside of the State of Maryland.
(b) Buyer is a limited liability company duly formed and
validly existing and in good standing under the laws of the State of
Maryland and has all requisite limited liability company power and
lawful authority to (i) enter into this Agreement and to perform its
obligations hereunder, (ii) own, lease and operate its properties and
assets as they are now owned, leased and operated, and (iii) carry on
its business as now conducted and presently proposed to be conducted.
Except as set forth on Schedule 6.1, Buyer is not qualified to conduct
business in any jurisdiction outside of the State of Maryland.
Section 6.2. Authorization of Buyer. Each of Buyer and FTI has the
full legal right, power and all authority of a corporation or a limited
liability company, as applicable, to enter into, execute and deliver this
Agreement, to perform fully its obligations hereunder and consummate the
transactions contemplated hereby. All necessary and appropriate corporate or
limited liability company action, as applicable, has been taken by each of Buyer
and FTI with respect to the execution and delivery of this Agreement and the
performance of its obligations hereunder and this Agreement has been duly
executed and delivered by Buyer and FTI and constitutes the valid and binding
obligation of Buyer and FTI enforceable against Buyer and FTI in accordance with
its terms except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors' rights generally and subject to general principles of equity.
Section 6.3. Non-Contravention. Neither the execution and delivery
of this Agreement by Buyer or FTI nor the performance by Buyer or FTI of the
transactions contemplated hereby will: (a) violate or conflict with any of the
provisions of the Articles of Organization or operating agreement of Buyer or
the Articles of Incorporation or By-laws of FTI; (b) to Buyer or FTI's
knowledge, violate or conflict with any provisions of any law or order
applicable to Buyer
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or FTI; or (c) except as set forth on Schedule 6.3, to Buyer or FTI's knowledge,
require any consent or approval by or filing or notice with any governmental or
regulatory body or other Person except for: (i) filings under federal or state
securities or "blue sky" laws (which have been or will be made) and (ii) such as
would not have a material adverse effect on Buyer or FTI.
Section 6.4. Brokers. The transactions contemplated herein were
not submitted to Buyer or FTI by any broker or other person entitled to a
commission or finder's fee thereon, and were not with the consent of either
Buyer or FTI submitted to Sellers or Nextera by any such broker or other person.
Neither Buyer, FTI nor any of its officers, directors, managers or employees,
has engaged any broker or finder or incurred or taken any action which may give
rise to any liability against itself or the Assets for any brokerage fees,
commissions, finders' fees or similar fees or expenses and no broker or finder
has acted directly or indirectly for Buyer or FTI in connection with this
Agreement or the transactions contemplated hereby.
Section 6.5. Legal Proceedings, etc. There is no Litigation filed,
pending or, to the knowledge of FTI or Buyer, threatened against FTI or Buyer
and involving this Agreement or the transactions contemplated hereby before any
Governmental Authority. Neither FTI nor Buyer is subject to any judgment, order
or decree, or, to the knowledge of FTI or Buyer, any governmental restriction
applicable to FTI or Buyer, which reasonably could be expected to result in, or
which has, a material adverse effect on Buyer's ability to consummate the
transactions contemplated hereby.
ARTICLE VII
COVENANTS OF SELLERS AND NEXTERA
Section 7.1. Change of Name; Use of Name. Sellers and Nextera
acknowledge and agree that the names "Lexecon" and "Lexecon Consulting" or any
combination or derivation thereof are an Asset which shall be acquired by Buyer
hereunder. At or prior to the Closing Date, Lexecon shall change its corporate
name to one which is not the same as or similar to its present corporate name or
any other trademarks or service marks now used by Sellers. At Buyer's expense,
Seller and Nextera shall grant all reasonable consents and take any other and
further reasonable action requested by Buyer to enable Buyer to use, reserve or
register any such name for the exclusive use of Buyer; provided, that neither
Nextera nor any of Sellers will be required to pay any fees, commence any
litigation or make any other concessions to any person in connection with
providing such assistance. As soon as practicable and in any event no later than
thirty (30) days after the Closing, Sellers and Nextera shall discontinue use of
the names "Lexecon", "Lexecon Consulting" and any similar names. Sellers and
Nextera shall provide such assistance as Buyer may reasonably request at Buyer's
cost and expense in relation to any infringement, unfair competition, passing
off or similar claim which Buyer may bring in the future against any third party
based on the use of the "Lexecon" name.
Section 7.2. Conduct of Business Prior to the Closing. Sellers and
Nextera covenant that on and after the date hereof and prior to the Closing, and
except with respect to the Non-Compete Agreements or as otherwise consented to
or approved by an authorized officer of Buyer in writing, the Business shall be
conducted only in the ordinary course, including:
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(a) Nextera shall not declare, set aside or pay any
dividend or other distribution (whether in cash, securities or property
or any combination thereof) in respect of any class or series of its
capital stock or other equity interests;
(b) Sellers and Nextera shall not authorize or issue any
capital stock of Sellers or Nextera other than any issuance of capital
stock of Nextera upon exercise of any outstanding stock option
agreements; grant any stock option or right to purchase shares of
capital stock of Sellers or Nextera; issue any security convertible
into such capital stock; grant any registration rights; purchase,
redeem, retire, or otherwise acquire by Sellers or Nextera, any shares
of any such capital stock;
(c) Sellers shall not, other than in the ordinary course
of business, (i) sell, lease, transfer or dispose of any material
assets or rights or (ii) acquire or lease any material assets or
rights;
(d) Sellers shall not pay, discharge or satisfy any
material liability, obligation or lien with respect to underlying
obligations, other than payment, discharge or satisfaction of (i)
material Indebtedness as it matures and becomes due and payable; (ii)
liabilities, obligations or liens in the ordinary course of business;
or (iii) as otherwise contemplated by this Agreement;
(e) Sellers shall not materially (i) change any of the
accounting or tax principles, practices or methods or (ii) change
reserve policies or reserves;
(f) Except as set forth on Schedule 7.2, Sellers shall
not (other than in the ordinary course consistent with past practice)
(i) make any material change in the compensation payable to any of its
officers, directors, employees, agents, consultants or sales
associates, (ii) enter into or amend any material employment,
severance, consulting, termination or other agreement or any employee
benefit plan or (iii) make any material change, in any Seller Plan
listed on Schedule 5.16;
(g) Except as set forth on Schedule 7.2, Sellers shall
not (other than in the ordinary course consistent with past practice)
make any material payments, loans, advances or other distributions to,
or enter into any material transaction, agreement or arrangement with,
any officers, directors, employees, sales associates, stockholders or
their respective affiliates;
(h) Sellers shall not make or authorize any capital
expenditures, except in the ordinary course consistent with past
practice or not in excess of Twenty-Five Thousand Dollars ($25,000)
individually or One Hundred Thousand Dollars ($100,000) in the
aggregate;
(i) None of Sellers nor Nextera shall, with respect to
the Business prior to Closing and without the express written consent
of Buyer, (i) grant any compensation increases (other than any increase
required by law) to any Business employee, other than normal merit and
cost of living increases in the ordinary course of business consistent
with past practice, or grant any severance or termination pay to any
officer, director or Business employee or enter into any employment or
consulting agreement with any such
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person, (ii) except as set forth on Schedule 7.2, enter into any new,
or materially amend or alter any Seller Plan or make any payments to
any Business employees other than as contemplated by Seller Plans
existing as of the date of this Agreement.
(j) Sellers shall not settle or compromise any Tax
liability or agree to any adjustment of any Tax attribute or made any
election with respect to Taxes;
(k) Sellers shall not make any change in its working
capital practices generally, including accelerating any collections of
cash or accounts receivable or deferring payments or accruals;
(l) Sellers shall not incur any material liability other
than in the ordinary course of business consistent with past practice
and other than as permitted under this Section 7.2;
(m) Sellers shall not have a judgment entered or settle
any Litigation resulting in a loss, payment or other cost, after
receipt of insurance payments, individually or in the aggregate, in
excess of Twenty-Five Thousand Dollars ($25,000);
(n) Sellers shall not amend its respective Formation
Documents or alter through merger, liquidation, reorganization,
restructuring or in any other fashion its respective corporate
structure or ownership;
(o) Sellers shall not modify, waive, change, amend,
release, or terminate any material Contract, agreement, license or
other instrument to which any of Sellers is a party, including all
material customer/consulting agreements, other than any satisfaction by
performance in accordance with the terms thereof in the ordinary course
of business;
(p) Seller shall not enter into or amend in an adverse
manner any agreement which had non-competition, geographical
restriction or similar covenants that would be material;
(q) Sellers shall use commercially reasonable efforts to
maintain, preserve and protect all of its assets and properties
necessary to operate the Business, whether real or personal, tangible
or intangible, in good condition, ordinary wear and tear and damage by
fire or other casualty excepted;
(r) The books, records and accounts of Sellers shall be
maintained in the ordinary course of business and in accordance with
generally accepted accounting principles; and
(s) Sellers and Nextera shall use commercially reasonable
efforts to preserve Sellers' business organization, to keep available
the services of Sellers' present employees, to preserve the good will
of Sellers' suppliers, clients and others having business relations
with Sellers, and to use commercially reasonable efforts to assist
Sellers in retaining the services of key employees and agents of
Sellers for Buyer after the Closing Date on terms reasonably
satisfactory to Buyer; provided, that, other than payments under the
Non-Compete Agreements, neither Nextera nor any of Sellers will be
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required to pay any fees, commence any litigation or make any other
concessions to any person in performing such activities.
Section 7.3. Stockholder Meeting. Subject to Section 7.4, Nextera
shall cause a meeting of the Nextera Stockholders (the "NEXTERA STOCKHOLDER
MEETING") to be duly called and held as promptly as reasonably practicable after
the date hereof for the purpose of obtaining Nextera Stockholder Approval.
Subject to Section 7.4, Nextera's Board of Directors shall recommend approval
and adoption by the Nextera Stockholders of this Agreement and the transactions
contemplated hereby (the "NEXTERA RECOMMENDATION"), and Nextera shall take all
other reasonable lawful action to solicit and secure the Nextera Stockholder
Approval. Subject to Section 7.4, the Nextera Recommendation, together with a
copy of the opinion referred to in Section 5.12, shall be included in the Proxy
Statement.
Section 7.4. Non-Solicitation.
(a) Acquisition Proposal.
(i) Nextera agrees that it shall not, nor shall
it permit Sellers to, nor shall it authorize or knowingly permit any
officer, director, employee, affiliate, investment banker, attorney,
accountant, agent or other advisor or representative of Nextera or
Sellers, directly or indirectly, to (i) solicit, initiate or otherwise
encourage the submission of any Acquisition Proposal, (ii) participate
in any discussions or negotiations regarding, or furnish to any Person
any information with respect to, or take any other action knowingly to
facilitate any inquiries or the making of any proposal that
constitutes, or that would reasonably be expected to lead to, an
Acquisition Proposal, (iii) grant any waiver or release under any
standstill or similar agreement with respect to any class or series of
Nextera or Sellers' equity securities to the extent such waiver or
release would permit the other party or parties to such agreement to
actually acquire such securities or approve any matter for purposes of
Section 203 of the DGCL with respect to any Person (for the avoidance
of doubt, a waiver or release under such agreement that solely permits
a proposal or offer, including, without limitation, an Acquisition
Proposal, would not violate this clause (iii)), or (iv) enter into any
agreement with respect to any Acquisition Proposal.
(ii) Nextera shall notify Buyer promptly (but in
no event later than the third Business Day) after receipt by Nextera or
Sellers of any Acquisition Proposal or any request for information
relating to Nextera or Sellers in connection with an Acquisition
Proposal or for access to the properties, books or records of Nextera
or Sellers or any request for a waiver or release under any standstill
or similar agreement by any Person that has made, or informs the Board
of Directors of Nextera or Sellers that it is considering making, an
Acquisition Proposal. The notice shall indicate the material terms and
conditions of the proposal or request and the identity of the Person
making it, and Sellers will promptly notify Buyer of any material
modification of or material amendment to any Acquisition Proposal (and
the terms of such modification or amendment); provided, however, that,
without limiting what changes may be material, any change in the form,
amount, timing or other aspects of the consideration to be paid
- 32 -
with respect to the Acquisition Proposal shall be deemed to be a
material modification or a material amendment.
(iii) (A) Except as permitted by Section 7.4(b),
neither the Board of Directors of Nextera nor or any other committee
thereof shall amend, withdraw, modify, change, condition or qualify in
any manner adverse to Buyer, the Nextera Recommendation (it being
understood and agreed that a communication by the Board of Directors of
Nextera to Nextera Stockholders pursuant to Rule 14d-9(f) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or
any similar communication to the Nextera Stockholders in connection
with the making or amendment of a tender offer or exchange offer by any
Person, shall not be deemed to constitute a withdrawal, modification,
amendment, condition or qualification of the Nextera Recommendation for
purposes of this Section 7.4) and (B) unless Nextera's Board of
Directors has previously withdrawn, or is concurrently therewith
withdrawing, the Nextera Recommendation in accordance with this Section
7.4, Nextera's Board of Directors shall not recommend any Acquisition
Proposal to the Nextera Stockholders. Nothing contained in this Section
7.4 or elsewhere in this Agreement shall (i) prevent Nextera's Board of
Directors from complying with Rule 14e-2 under the Exchange Act with
respect to any Acquisition Proposal or making any disclosure required
by applicable law or (ii) prohibit accurate disclosure of factual
information regarding the business, financial condition or results of
operations of Nextera or Sellers, or the fact that an Acquisition
Proposal has been made, the identity of the party making such
Acquisition Proposal or the material terms of such Acquisition Proposal
to the extent such information, facts, identity or terms are required
to be disclosed under applicable law.
(b) Superior Proposal.
(i) Notwithstanding Section 7.4(a), if Nextera
or any Seller receives an unsolicited Acquisition Proposal that the
Nextera's Board of Directors determines in good faith is or could
reasonably be expected to lead to the delivery of a Superior Proposal
from the Person which made such unsolicited Acquisition Proposal,
Nextera may, subject to compliance with all the other provisions of
this Section 7.4, furnish information to and engage in discussions and
negotiations with the Person making such offer with respect to its
Acquisition Proposal ("PERMITTED ACTIONS"); provided that prior to
engaging in any Permitted Actions (A) Nextera's Board of Directors
concludes in good faith, after consultation with outside legal counsel
and outside financial advisors, that, as a result of such Acquisition
Proposal, such Permitted Action is necessary for Nextera's Board of
Directors to act in a manner consistent with its fiduciary duties under
applicable law, (B) Nextera shall receive from such Person an executed
confidentiality agreement on terms that are not materially less
favorable to Nextera and Sellers than the Confidentiality Agreement,
(C) the Board of Directors of Nextera shall provide Buyer with prompt
notice (but in no event later than the third Business Day) of its
engaging in any Permitted Actions. Nextera shall keep Buyer informed,
on a current basis, of the status of any material negotiations,
discussions and documents with respect to such Acquisition Proposal or
request.
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(ii) Notwithstanding the foregoing Section 7.4(a), as a
result of a Superior Proposal, the Board of Directors of Nextera may
withdraw or modify the Nextera Recommendation in a manner adverse to
Buyer if (i) Nextera has complied in all material respects with this
Section 7.4 and (ii) Nextera shall have notified Buyer at least two (2)
Business Days in advance of its intention to effect such withdrawal or
modification of the Nextera Recommendation.
(iii) Notwithstanding anything in this Section 7.4 to the
contrary, at any time prior to obtaining Nextera Stockholder Approval,
the Board of Directors of Nextera may, in response to a Superior
Proposal that was unsolicited and that did not otherwise result from a
breach of this Section 7.4, cause Sellers to terminate this Agreement
pursuant to Section 12.1(c)(ii) and concurrently enter into an
agreement regarding such Superior Proposal; provided, however, that
neither Nextera nor Sellers shall terminate this Agreement pursuant to
Section 12.1(c)(ii), and any purported termination pursuant to Section
12.1(c)(ii) shall be void and of no force or effect (and Nextera or
Sellers may not enter into such agreement regarding such Superior
Proposal), unless Sellers and Nextera shall have complied in all
material respects with all the provisions of this Section 7.4,
including the notification provisions in this Section 7.4, and with all
applicable requirements of Section 12.2(c) prior to or concurrently
with such termination) in connection with such Superior Proposal; and
provided further, that Nextera shall not exercise its right to
terminate this Agreement pursuant to Section 12.1(c)(ii) until after
the second Business Day following the date notice is given to Buyer in
accordance with Section 13.1 (a "NOTICE OF SUPERIOR PROPOSAL") from
Nextera advising Buyer that the Board of Directors of Nextera has
received a Superior Proposal, (i) specifying the material terms and
conditions of the Superior Proposal, (ii) identifying the Person making
such Superior Proposal and (iii) stating that the Board of Directors of
Nextera intends to exercise its right to terminate this Agreement
pursuant to Section 12.1(c)(ii) (it being understood and agreed that,
prior to any such termination taking effect, any amendment to the price
or any other material term of a Superior Proposal (such amended
Superior Proposal, a "MODIFIED SUPERIOR PROPOSAL") shall require a new
Notice of Superior Proposal and a new two Business Day period with
respect to such Modified Superior Proposal).
(iv) Immediately upon the execution of this Agreement,
Nextera shall cease, and shall cause any Person acting on its behalf to
cease, and cause to be terminated any existing discussions or
negotiations with any Person conducted heretofore with respect to any
of the foregoing and shall request any such parties in possession of
confidential information about Nextera or Sellers that was furnished by
or on behalf of Nextera or Sellers to return or destroy all such
information in the possession of any such party or the agent or advisor
of any such party.
Section 7.5. Payoff of Indebtedness. At the Closing, Buyer
and Sellers agree that a portion of the Cash Closing Amount shall be applied to
repay and discharge in full the Indebtedness as contemplated by Section 3.2(a),
and as evidenced by a funds flow memorandum delivered by Sellers to Buyer at
least five (5) business days prior to the Closing in form and substance
satisfactory to Buyer.
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Section 7.6. Employment Agreements. Sellers and Nextera agree to
cooperate and use commercially reasonable efforts to cause each of the
individuals listed on Schedule 7.6 to enter into Employment and Non-Competition
Agreements with Buyer in the form mutually agreed between Buyer and such
individuals (each, an "EMPLOYMENT AGREEMENT"); provided, that, other than
payments under the Non-Compete Agreements, neither Nextera nor any of Sellers
will be required to pay any fees, commence any litigation or make any other
concessions to any person in order to provide such cooperation.
Section 7.7. Covenant Against Hiring. Sellers and Nextera agree
that they shall not take any action to induce any employee or representative of
Sellers not to become or continue as an employee or representative of Buyer and
Sellers and Nextera shall assist Buyer in its efforts to hire employees of
Sellers who Buyer desires to hire. Without limiting the generality of the
foregoing, Sellers and Nextera shall not, whether directly or indirectly through
any subsidiary or affiliate, employ or retain, whether an employee, officer,
director, agent, consultant or independent contractor, or in any other capacity
whatsoever, or enter into any partnership, joint venture or other business
association with, any person who was at any time an employee, representative,
officer, director or manager of Sellers, for a period of 12 months after such
person ceases or has ceased, for any reason, to be an employee, representative,
officer or director of Sellers.
Section 7.8. Noncompetition. For a period of five years after the
Closing Date, Sellers and Nextera shall not directly or indirectly through any
subsidiary or affiliated organization or through any director, officer, agent,
employee or other individual, in any capacity, in the United States and Canada:
(a) Enter into or engage in or own any interest in any
business which directly or indirectly manages or otherwise competes
with the Business as it is conducted on the Closing Date;
(b) Solicit customers, business, patronage or orders for
any business which directly or indirectly competes with the Business as
it is conducted on the Closing Date; and
(c) Loan money or credit to or promote or provide
financial assistance to any person, firm, association, corporation or
other entity engaged in any of the services or activities described
above or which directly or indirectly competes with the Business as it
is conducted on the Closing Date.
Section 7.9. Legal Examination and Investigation. Subject to its
confidentiality policies regarding the Excluded Assets and any employees that
are not hired by Buyer, on and prior to the Closing Date, Sellers and Nextera
shall permit Buyer, FTI and its legal counsel to conduct a legal review,
examination or investigation of the Contracts, Permits, books, records, tax
returns, and operations of Sellers and Nextera that are related to the Business
as Buyer, FTI or its legal counsel may wish. Any such investigation and
examination shall be conducted at reasonable times following reasonable notice
and under reasonable circumstances and Sellers and Nextera shall cooperate fully
therein. In the event that, as a result of any such investigation, Buyer or FTI
has Knowledge of any fact that makes untrue any representation or warranty of
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Sellers or Nextera hereunder, Buyer shall promptly (but in no event later than
the third Business Day) provide Sellers and Nextera with written notice of such
fact. Sellers and Nextera shall furnish the Buyer and FTI during such period
with all such information and copies of such documents concerning the Business
that Buyer, FTI or its legal counsel may reasonably request and cause its
officers, employees, consultants, agents, accountants and attorneys to
reasonably cooperate with such representatives in connection with such review
and examination and to make full disclosure to Buyer and FTI of all material
facts affecting the Business.
Section 7.10. Notice of Events. Sellers and Nextera shall promptly
notify Buyer of (a) any event, condition or circumstance occurring from the date
hereof through the Closing Date that would constitute a violation or breach of
this Agreement, (b) any event, occurrence, transaction or other item which would
have been required to have been disclosed on any schedule or statement delivered
hereunder had such event, occurrence, transaction or item existed on the date
hereof, other than items arising in the ordinary course of business which would
not render any representation or warranty of Sellers or Nextera materially
misleading.
Section 7.11. Tail Insurance. At Buyer's sole cost and expense, at
or prior to Closing, Sellers shall obtain "occurrence based" professional
liability insurance coverage or "tail" insurance from a carrier reasonably
acceptable to Buyer, naming Buyer as an additional insured, in the amount of at
least $5 million of primary coverage and $10 million of excess coverage, for
acts or omissions arising in the operation or conduct of the Business prior to
the Closing.
ARTICLE VIII
COVENANTS OF SELLERS AND BUYER
Section 8.1. Xxxx-Xxxxx-Xxxxxx and Other Filings.
(a) As promptly as practicable, and in any event within
five (5) Business Days following the execution and delivery of this
Agreement by the Parties, Sellers, Nextera, Buyer and FTI shall each
prepare and file any required notification and report form under the
HSR Act, in connection with the transactions contemplated hereby. Buyer
and Nextera shall each bear one-half of any filing fees in connection
with such filing. Sellers, Nextera, Buyer and FTI shall take or cause
to be taken all commercially reasonable actions and do or cause to be
done all things reasonably necessary, proper or advisable in the sole
judgment of such Party, as the case may be, to obtain prompt
termination of the waiting period under the HSR Act.
(b) Sellers, Nextera, Buyer and FTI shall cooperate, (i)
in determining whether, in addition to the filings required by the HSR
Act, any action by or in respect of, or filing with, any Governmental
Authority in connection with the consummation of the transactions
contemplated by this Agreement is required and (ii) in taking such
commercially reasonable actions or making any such filings, furnishing
information required in connection therewith. As promptly as
practicable, following the execution and delivery of this Agreement by
the Parties, Sellers, Nextera, Buyer and FTI shall prepare and file any
other application, report, or other filing required to be submitted to
any other Governmental Authority in connection with the transactions
contemplated
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hereby, the filing fees of which (except as provided in clause (a)
above) shall be borne by the party required to make such filing.
Section 8.2. Proxy Statement. As soon as practicable and in any
event no later than thirty (30) days after execution of this Agreement, Nextera
shall prepare and file the Proxy Statement with the SEC under the Exchange Act.
Nextera will use commercially reasonable efforts to have the Proxy Statement
cleared by the SEC. Buyer and Nextera shall cooperate with each other in the
preparation of the Proxy Statement, and Nextera shall notify Buyer of the
receipt of any comments of the SEC with respect to the Proxy Statement and of
any requests by the SEC for any amendment or supplement thereto or for
additional information and shall provide to Buyer promptly copies of all
correspondence between Nextera or any representative of Nextera or Sellers and
the SEC. Nextera shall give Buyer and its counsel the opportunity to review and
comment on the Proxy Statement and any other documents filed with the SEC or
mailed to the Nextera Stockholders prior to their being filed with, or sent to,
the SEC or mailed to such Nextera Stockholders and shall give Buyer and its
counsel the opportunity to review and comment on all amendments and supplements
to the Proxy Statement and any other documents filed with, or sent to, the SEC
or mailed to the Nextera Stockholders and all responses to requests for
additional information and replies to comments prior to their being filed with,
or sent to, the SEC or mailed to the Nextera Stockholders. Each of Sellers,
Nextera and Buyer agrees to use its commercially reasonable efforts, after
consultation with the other Parties hereto, to respond promptly to all such
comments of and requests by the SEC. As promptly as practicable after the Proxy
Statement has been cleared by the SEC, Nextera shall mail the Proxy Statement to
the Nextera Stockholders. Each of Sellers, Nextera and Buyer promptly shall
correct any information provided by it and used in the Proxy Statement that
shall have become false or misleading in any material respect, and Nextera shall
take all steps necessary to file with the SEC and have cleared by the SEC any
amendment or supplement to the Proxy Statement so as to correct the same and to
cause the Proxy Statement as so corrected to be disseminated to the Nextera
Stockholders, in each case to the extent required by applicable law.
Section 8.3. Public Announcements. The Parties shall cooperate
with each other in the development and distribution of, and consult with each
other before issuing, any press release or making any public statement with
respect to this Agreement and the transactions contemplated hereby and shall not
issue any such press release or make any such public statement without the prior
consent of the other Parties (which shall not be unreasonably withheld or
delayed), except as may be required by applicable law or any listing agreement
with any securities exchange or the National Association of Securities Dealers.
Section 8.4. Employment Matters. Except for the employees of
the Sellers listed on Schedule 8.4, Buyer may offer employment as of the Closing
to employees of Sellers employed in the Business in its sole discretion and
Buyer shall not be obligated to hire any particular employee. Employees of
Sellers employed in the Business who accept Buyer's offer of employment and
commence employment with Buyer as of the Closing are hereinafter referred to as
"HIRED EMPLOYEES." No later than 30 days prior to the Closing Date, Buyer shall
disclose in writing to Sellers the employees of Sellers employed in the Business
as of the date of this Agreement who will not be offered employment with Buyer.
Schedule 5.15 sets forth (a) the individuals who perform services in the
Business operations of Sellers and Nextera in the capacity of an employee or
independent contractor as well as the job classification and principal
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work location for each such individual, (b) any individual who has terminated
his or her employment or engagement, or, to the Knowledge of Sellers or Nextera,
plans not to continue his or her employment or engagement with Sellers or
Nextera after the date hereof and (c) all individuals who formerly performed
services in the Business operations of Sellers and Nextera in the capacity of an
employee or independent contractor and whose employment or engagement terminated
on or after January 1, 2003. Sellers shall provide Buyer with an updated copy of
Schedule 5.15 on the Closing if any information called for by the preceding
sentence shall have changed between the date hereof and the Closing Date. Buyer
shall assume, satisfy and discharge the following employment-related obligations
of Sellers (the "ASSUMED EMPLOYMENT LIABILITIES"): (i) any WARN compliance
obligations to the employees of Sellers employed in the Business who are
employees immediately before the Closing and who are not offered employment with
the Buyer (subject to reduction for any benefits paid under the Seller Plans);
(ii) continuation health coverage as required under Treasury Regulation Section
54.4980B-9, Q&A-8(c)(1) following the later of the Closing Date and the date
Sellers cease to maintain any group health plan; (iii) any Liabilities Sellers
have to Hired Employees for wages, salary, bonus (including Sellers' Liability
to make the payments that are due and payable to Messrs. Carlton and Xxxxxxx set
forth on Schedule 8.4, but not including any Liabilities of Sellers for the
non-compete payments set forth on Schedule 9.19), commissions and vacation pay
that have accrued as of the Closing Date, have not been paid by Sellers on or
before the Closing Date and are finally due and payable in accordance with
Sellers' past practice on or after the Closing Date; and (iv) any other
Liabilities set forth on Schedule 8.4 under the caption "Assumed Employment
Liabilities." Sellers agree that an amount equal to the Assumed Employment
Liabilities described in clauses (iii) and (iv) above, shall be (A) treated as a
Current Liability in the calculation of Working Capital pursuant to Section 3.5,
(B) disclosed to Buyer in reasonable detail no later than five (5) days before
the Closing Date on an updated Schedule 8.4 (under the caption "Assumed
Employment Liabilities") and (C) updated by Sellers on a final version of
Schedule 8.4 as of the Closing Date. Immediately before the Closing, Sellers
shall pay to the employees of Sellers employed in the Business (whether or not
they are Hired Employees) any and all Liabilities relating to or arising out of
their employment with Sellers or termination of employment, including any
payments and benefits due such employees pursuant to accrued wages, salary,
bonus, commission, Non-Compete Agreements or other forms of compensation and any
benefits and severance payments or similar benefits, except for (i) benefits
that are not immediately payable under the terms of Seller Plans as set forth on
Schedule 8.4, which Sellers shall pay after the Closing Date in accordance with
the terms of the Seller Plans, and (ii) the Assumed Employment Liabilities. From
and after the Closing, Sellers shall retain all liabilities of Sellers, other
than the Assumed Employment Liabilities, arising under, resulting from or
relating to the Seller Plans or Sellers' employment of or termination of the
employees of the Business, accruing on or prior to the Closing, including,
without limitation, all severance obligations and any liabilities relating to
the Non-Compete Agreements. Nextera shall use commercially reasonable efforts to
maintain a health plan until it liquidates and ceases operations. Nextera shall
notify Buyer in writing no later than 30 days prior to the date Nextera will
cease to maintain any group health plan and shall provide to Buyer any
information Buyer may reasonably request to enable Buyer to provide COBRA
continuation coverage in accordance with this paragraph. Pursuant to the
"Alternative Procedure" provided in Section 5 of Revenue Procedure 96-60, 1996-2
C.B. 399, (i) Buyer and Sellers shall report on a predecessor/successor basis as
set forth therein, (ii) Sellers will be relieved from filing a Form W-2 with
respect to any
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Hired Employee and (iii) Buyer will file (or cause to be filed) a Form W-2 for
each Hired Employee for the year that includes the Closing Date (including the
portion of such year that such employee was employed by Sellers).
Section 8.5. Confidentiality Agreement. The Parties acknowledge
that Nextera, Sellers and FTI entered into that certain Amended and Restated
Confidentiality Agreement, dated as of July 14, 2003 (the "CONFIDENTIALITY
AGREEMENT"), which agreement shall continue in full force and effect in
accordance with its terms until the expiration of the agreement according to its
terms. Notwithstanding anything in the Confidentiality Agreement or herein to
the contrary, or in any other written or oral understanding or agreement to
which the Parties hereto are parties or by which they are bound, the Parties
acknowledge and agree that any obligations of confidentiality contained therein
and herein shall not apply to the tax treatment and tax structure of the
transactions contemplated by this Agreement upon the earlier to occur of (a) the
date of the public announcement of discussions relating to such transactions,
(b) the date of the public announcement of such transactions, or (c) the date of
the execution of this Agreement, all within the meaning of Treasury Regulations
Section 1.6011-4.
Section 8.6. Efforts to Satisfy Conditions. Sellers, Nextera,
Buyer and FTI shall use their commercially reasonable efforts to cause the
conditions contained herein to be satisfied.
Section 8.7. Bulk Sales. Seller shall comply with any applicable
"bulk sales" law or regulation relating to transfers governed by Article 6 of
the Uniform Commercial Code or any other applicable laws or regulations relating
to bulk transfers (other than tax laws) in connection with the consummation of
the transactions contemplated hereby.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND FTI
The obligations of Buyer and FTI to be performed at the Closing shall
be subject to the satisfaction as of or before the Closing Date of the following
conditions (unless waived in writing by Buyer and FTI):
Section 9.1. Nextera Stockholder Approval. The Nextera Stockholder
Approval shall have been obtained.
Section 9.2. HSR Act; Consents; Filings.
(a) any applicable waiting period or required approval
under the HSR Act, or any other similar applicable law required prior
to the completion of the transactions contemplated hereby, shall have
expired or been earlier terminated or received;
(b) no Governmental Authority shall have issued any law
or decision or taken any other action then in effect, which restrains,
enjoins or otherwise prohibits or makes illegal the consummation of the
transactions contemplated hereby; provided, however, that the Parties
hereto shall use their commercially reasonable efforts to have any such
restraint, injunction or prohibition removed or vacated;
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(c) Sellers and Nextera shall have obtained and delivered
to Buyer those consents listed on Schedule 5.14; and
(d) the Parties shall have received from any and all
Governmental Authorities having jurisdiction over the transactions
contemplated by this Agreement or any part hereof, such consents,
authorizations and approvals as are necessary for the consummation
thereof which are contemplated by Section 8.1.
Section 9.3. Representations and Warranties. Sellers' and
Nextera's representations and warranties set forth in this Agreement or any
schedule hereto shall have been true and correct in all material respects when
made and shall be true and correct in all material respects at and as of the
Closing Date as if such representations and warranties were made as of the
Closing Date, except (i) for such representations and warranties qualified by
materiality, which shall be true and correct in all respects (as so qualified),
and (ii) to the extent that any such representation or warranty expressly
relates to an earlier date and except for changes therein permitted or
contemplated by this Agreement.
Section 9.4. Officers' Certificate. Buyer shall have received a
certificate from Sellers and Nextera, executed by the Chief Executive Officer
and secretary of Sellers and Nextera, to the effect that (1) Sellers' and
Nextera's representations and warranties set forth in Article V of this
Agreement are true and correct in all material respects as of the date of
Closing, except (i) for such representations and warranties qualified by
materiality, which shall be true and correct in all respects (as so qualified),
and (ii) to the extent that any such representation or warranty expressly
relates to an earlier date and except for changes therein permitted or
contemplated by this Agreement, (2) Sellers and Nextera have obtained all
material consents of third parties and governmental officials necessary or
appropriate in order to consummate the transfer of the Assets to Buyer, (3)
Sellers and Nextera have performed and complied in all material respects with
all covenants required to be performed or complied with by them prior to the
Closing, (4) all conditions to Buyer's obligations to be satisfied by Sellers
and/or Nextera set forth in this Article IX have been satisfied, (5) to their
knowledge there exists no pending or threatened claim, action, arbitration,
grievance, Litigation or proceeding, judicial or administrative, or governmental
investigation against Sellers or Nextera or the Assets for the purpose of
enjoining or preventing the consummation of the transactions contemplated by
this Agreement, or claiming that this Agreement or the transactions contemplated
hereby are illegal.
Section 9.5. Closing Certificates. Buyer shall have received:
(a) a duly executed certificate from an authorized
officer of (x) Sellers and (y) Nextera certifying in such detail as
Buyer may reasonably request to (i) (x) Sellers' and (y) Nextera's and
Formation Documents, (ii) resolutions or minutes of the members of the
Board of Directors of (x) Sellers and (y) Nextera pertaining to the
authorization of this Agreement on behalf of itself and as the sole
shareholder of Lexecon, CE and/or ERG, as the case may be, and all
other instruments, documents, transactions and agreements contemplated
hereby, and (iii) the incumbency of the executing officers of (x)
Sellers and (y) Nextera; and
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(b) a copy of the Certificate of Incorporation of each of
Sellers and Nextera, certified as of a recent date by the Secretaries
of State of the states of their incorporation, along with certificates
of existence and good standing of Sellers and Nextera as of a recent
date from the Secretaries of State of the states of their
incorporation.
Section 9.6. Voting Agreement. The Voting Agreement shall have
been executed and delivered to Buyer and shall be binding and enforceable is
accordance with its terms.
Section 9.7. Opinion of Counsel. Buyer shall have received the
legal opinions of Maron & Sandler and Xxxxxx & Xxxxxxx LLP in substantially the
forms attached hereto as Exhibit C and Exhibit D, respectively.
Section 9.8. Solvency Opinion/Fair Value. Sellers shall have
received the solvency/fair value opinion from Xxxxxxxx Valuation Advisors,
Nextera's financial advisor in form and substance reasonably satisfactory to
Buyer, which includes an opinion that the Purchase Price constitutes an amount
of consideration that is "reasonably equivalent value" (as such phrase is
defined in the United States Bankruptcy Code, 11 U.S.C. 101 et seq., and cases
thereunder) and "fair consideration" (as such phrase is defined in the Uniform
Fraudulent Conveyance Act as now enacted in the States of New York and Delaware
and cases thereunder) to Sellers in exchange for the Assets.
Section 9.9. Fairness Opinion. Nextera shall have received a
written opinion of Xxxxxxxx Valuation Advisors dated the date hereof, to the
effect that, as of the date hereof, the Purchase Price is fair to Sellers,
Nextera and Nextera's Stockholders from a financial point of view.
Section 9.10. Performance of Agreement. All covenants, conditions
and other obligations under this Agreement which are to be performed or complied
with by Sellers or Nextera shall have been fully performed and complied with in
all material respects on or prior to the Closing Date.
Section 9.11. No Adverse Change. Since the Balance Sheet Date,
there shall have been no change, loss or damage to the Assets or the Business,
except for (i) changes in the ordinary course of business, (ii) changes
contemplated hereby or relating to the transactions contemplated hereby or (iii)
changes which could not reasonably be expected to result in, or which have not
had, a Material Adverse Effect; provided that notwithstanding the foregoing, if
Buyer can demonstrate, acting in good faith, that customers representing more
than five percent (5%) of Sellers' revenues reflected on the statement of
operations for the twelve (12) month period immediately preceding the Closing
Date intend to terminate their business relationship with Sellers as a direct
result of Buyer acquiring the Assets and the Parties consummating the
transactions contemplated by this Agreement (excluding from such calculation any
such customers that terminate their relationship with Sellers due to actual or
perceived conflicts with FTI or Buyer and/or any of FTI's customers or clients),
such circumstance shall be deemed to be a Material Adverse Effect.
Section 9.12. No Proceedings. There is no pending or threatened
claim, action, litigation or proceeding, judicial or administrative, or
governmental investigation against Buyer,
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FTI, Sellers, Nextera or the Assets for the purpose of enjoining or preventing
the consummation of the transactions contemplated by this Agreement, any of the
other Transaction Documents or the Voting Agreement or otherwise claiming that
the consummation this Agreement, any of the other Transaction Documents or the
Voting Agreement is illegal or invalid.
Section 9.13. Employment Agreements. Buyer shall have received an
Employment Agreement dated as of the date hereof duly executed and delivered by
each employee of Sellers listed on Schedule 7.6.
Section 9.14. Assignment of Leases. Buyer shall have received an
Assignment of each of the Real Property Leases from Sellers or Nextera in the
form attached hereto as Exhibit E ("LEASE ASSIGNMENT"), duly executed by Sellers
(or Nextera) as assignor, and the landlord under such Real Property Lease,
conveying all of Sellers' or Nextera's right, title and interest in and to the
Real Property Leases, accompanied by (a) a written consent of the landlord to
each such assignment and (b) an estoppel certificate from the landlord under
each of the Real Property Leases.
Section 9.15. Xxxx of Sale. Buyer shall have received from
Sellers a General Conveyance, Assignment and Xxxx of Sale in the form attached
hereto as Exhibit F, conveying, selling, transferring and assigning to Buyer all
right, title and interest in and to the Assets free and clear of all security
interests, liens, charges, encumbrances or equities whatsoever, except those
matters approved in writing by Buyer prior to the Closing Date.
Section 9.16. Transfer of Name and other Proprietary Rights.
Sellers and Nextera shall have delivered to Buyer, in form suitable for filing,
such certificates, consents and other documents as are necessary or desirable to
(i) effect the transfer of the registration of any name conveyed to Buyer
pursuant to this Agreement in the states of Sellers' incorporation and
organization and in each other state where Sellers are qualified to do business
or has registered any such name under a "TRADE NAME" or "FICTITIOUS NAME"
statute or similar law or has taken any other action in order to obtain or
protect rights in such name and (ii) effect the transfer of any other
Proprietary Rights being transferred to Buyer.
Section 9.17. Receipt. A receipt of Sellers with respect to amounts
paid to Sellers in Purchase Price pursuant to Section 3.2.
Section 9.18. Evidence of Payoff. At the Closing, Sellers shall
have delivered to Buyer documents in form and substance reasonably satisfactory
to Buyer evidencing (i) the repayment and discharge in full (without any
continuing adverse effect upon Sellers or Nextera) of the Indebtedness
(including the termination of any commitments to extend credit thereunder), (ii)
the termination and release of any liens granted in connection with the
Indebtedness and (iii) evidence of termination of all Encumbrances listed on
Schedule 5.11 reasonably satisfactory to Buyer, in each case subject to Sellers'
receipt of the Purchase Price.
Section 9.19. Non-Compete Payments. Sellers and Nextera shall have
made all non-compete payments listed on Schedule 9.19, in each case subject to
Sellers' receipt of the Purchase Price.
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Section 9.20. "FIRPTA" affidavits. Buyer shall receive FIRPTA
affidavits from Sellers and Nextera substantially in the form of Exhibit G
attached hereto.
Section 9.21. Other. Such other separate instruments of sale,
assignment or transfer that Buyer may reasonably deem necessary or appropriate
in order to perfect, confirm or evidence title to all or any part of the Assets.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
The obligations of Sellers and Nextera to be performed at the Closing
shall be subject to the satisfaction as of or before the Closing Date of the
following conditions (unless waived in writing by Sellers and Nextera):
Section 10.1. Nextera Stockholder Approval. Nextera Stockholder
Approval shall have been obtained.
Section 10.2. HSR Act; Consents; Filings.
(a) any applicable waiting period or required approval
under the HSR Act, or any other similar applicable law required prior
to the completion of the transaction contemplated hereby shall have
expired or been earlier terminated or received;
(b) no Governmental Authority shall have issued any law
or decision or taken any other action then in effect, which restrains,
enjoins or otherwise prohibits or makes illegal the consummation of the
transaction contemplated hereby; provided, however, that the Parties
hereto shall use their commercially reasonable efforts to have any such
restraint, injunction or prohibition removed or vacated; and
(c) the Parties shall have received from any and all
Governmental Authorities having jurisdiction over the transactions
contemplated by this Agreement or any part hereof, such consents,
authorizations and approvals as are necessary for the consummation
thereof which are contemplated by Section 8.1.
Section 10.3. Representations and Warranties. Buyer and FTI's
representations and warranties set forth in this Agreement and in any schedule
hereto shall have been true and correct in all material respects when made and
shall be true and correct in all material respects at and as of the Closing Date
as if such representations and warranties were made as of the Closing Date
except for such representations and warranties qualified by materiality, which
shall be true and correct in all respects (as so qualified).
Section 10.4. Officers' Certificate. Sellers shall have received a
certificate from Buyer and FTI, executed a duly authorized officer of Buyer and
FTI, to the effect that (1) each of Buyer's and FTI's representations and
warranties set forth in Article VI of the Agreement are true and correct in all
material respects as of the date of Closing, except (i) for such representations
and warranties qualified by materiality, which shall be true and correct in all
respects (as so qualified), and (ii) to the extent that any such representation
or warranty expressly
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relates to an earlier date and except for changes therein permitted or
contemplated by this Agreement, (2) each of Buyer and FTI have performed and
complied in all material respects with all covenants required to be performed or
complied with by it prior to the Closing and (3) all conditions to Nextera's and
Sellers' obligations to be satisfied by Buyer and FTI set forth in this Article
X have been satisfied.
Section 10.5. Closing Certificates. Sellers and Nextera shall have
received:
(a) a duly executed certificate from an authorized
officer of Buyer and FTI certifying in such detail as Nextera may
reasonably request to (i) Buyer and FTI's respective articles of
organization, articles of incorporation, operating agreement and
by-laws, (ii) resolutions or minutes of the members of the Board of
Directors of FTI and pertaining to the authorization of this Agreement
on behalf of itself and as parent of Buyer and all other instruments,
documents, transactions and agreements contemplated hereby, and (iii)
the incumbency of the executing officers of FTI; and
(b) a copy of the Articles of Incorporation of FTI and
articles of organization of Buyer, certified as of a recent date by the
Secretary of State of the State of Maryland, along with a certificate
of existence or good standing of Buyer and FTI from the Secretary of
State of the State of Maryland.
Section 10.6. Solvency Opinion/Fair Value. Sellers shall have
received the solvency/fair value opinion from Xxxxxxxx Valuation Advisors,
Nextera's financial advisor in form and substance reasonably satisfactory to
Buyer, which includes an opinion that the Purchase Price constitutes an amount
of consideration that is "reasonably equivalent value" (as such phrase is
defined in the United States Bankruptcy Code, 11 U.S.C. 101 et seq., and cases
thereunder) and "fair consideration" (as such phrase is defined in the Uniform
Fraudulent Conveyance Act as now enacted in the States of New York and Delaware
and cases thereunder) to Sellers in exchange for the Assets.
Section 10.7. Fairness Opinion. Nextera shall have received a
written opinion of Xxxxxxxx Valuation Advisors dated the date hereof, to the
effect that, as of the date hereof, the Purchase Price is fair to Seller,
Nextera and Nextera's Stockholders from a financial point of view.
Section 10.8. Assumption Agreement. Sellers shall have received
from Buyer such instruments of assumption, which shall be in form and substance
satisfactory to Nextera that are necessary or appropriate in order to evidence
the assignment to and the assumption by Buyer of the Assets and the Assumed
Liabilities.
Section 10.9. Opinion of Counsel. Sellers shall have received an
opinion of the Vice President, Secretary and General Counsel of FTI and Paul,
Hastings, Xxxxxxxx & Xxxxxx LLP in substantially the forms attached hereto as
Exhibit H and Exhibit I, respectively.
Section 10.10. Payments at Closing. Sellers shall have received by
wire transfer of immediately available funds amounts equal to the Cash Closing
Amount and the Medical Plan Payment, and Buyer shall have deposited the Escrow
Amount in a third party escrow account into accordance with Section 3.2(b).
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Section 10.11. Performance of Agreement. All covenants, conditions
and other obligations under this Agreement which are to be performed or complied
with by Buyer and FTI shall have been fully performed and complied with in all
respects on or prior to the Closing Date.
Section 10.12. No Adverse Proceeding. There is no pending or
threatened claim, action, litigation or proceeding, judicial or administrative,
or governmental investigation against Buyer, FTI, Sellers, Nextera or the Assets
for the purpose of enjoining or preventing the consummation of the transactions
contemplated by this Agreement, or otherwise claiming that this Agreement or the
consummation hereof is illegal.
ARTICLE XI
INDEMNIFICATION
Section 11.1. Survival of Representations, Warranties and
Agreements.
(a) Subject to the limitations set forth in Section 11.4
of this Agreement and notwithstanding any investigation conducted at
any time with regard thereto by or on behalf of Buyer or FTI, all
representations, warranties, covenants and agreements of Sellers and
Nextera in this Agreement and in the Transaction Documents shall
survive execution and delivery of this Agreement for a period of
twenty-four (24) months, provided, however that (i) the representations
and warranties set forth in Sections 5.6, 5.12, 5.16, 5.23 and 6.4
shall survive until the expiration of their applicable statutes of
limitations and (ii) the representations and warranties contained in
Sections 5.1, 5.2, 5.8, 5.11, 5.14, 6.1, 6.2 and 6.3 shall survive
indefinitely. All representations and warranties of Sellers and Nextera
and Buyer and FTI set forth in this Agreement and in the Transaction
Documents shall be deemed to have been made again by Sellers and
Nextera as of the Closing Date. In the event any claim for
indemnification under Section 11.2 hereof shall have been given within
the applicable survival period, the representations and warranties that
are the subject of such indemnification claim shall survive until such
time as such claim is finally resolved.
(b) As used in this Article, any reference to a
representation, warranty or covenant contained in any Section of this
Agreement shall include the schedule relating to such Section.
(c) Unless a specified period is set forth in this
Agreement (in which event such specified period will control) the
covenants contained herein will survive the Closing and remain in
effect indefinitely.
Section 11.2. Indemnification by Sellers and Nextera.
(a) Subject to the limitations set forth in Section 11.4
of this Agreement, Sellers and Nextera, jointly and severally, shall
indemnify and hold harmless the Buyer, FTI and their respective
affiliates, officers, directors, stockholders, agents and each of their
respective heirs, successors, assigns and executors ("BUYER INDEMNIFIED
PARTIES"), from and against any and all losses, liabilities, damages,
demands, claims, suits, actions, diminution in value, judgments or
causes of action, assessments, costs and expenses,
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including, without limitation, interest, penalties, attorneys' fees,
any and all expenses incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation (collectively, "DAMAGES"), asserted against, resulting to,
imposed upon, or incurred or suffered by any Buyer Indemnified Party,
directly or indirectly, as a result of or arising from the following
(collectively, "SELLER INDEMNIFIABLE CLAIMS"):
(A) Any inaccuracy in or breach or nonfulfillment of
any of the representations, warranties, covenants or
agreements made by Sellers or Nextera in this Agreement;
(B) Any Excluded Liabilities;
(C) Any Litigation relating to the Business; or
(D) Any liability or obligation incurred by Sellers
or Nextera following the Closing not related to the Business.
(b) Damages shall be determined without regard to whether
or not, apart from the Seller Indemnifiable Claim with respect to such
Damages, the transactions provided for in this Agreement prove
generally to be favorable to Buyer and without regard to whether or not
the facts and circumstances covered by any representation, warranty or
covenant prove to be more favorable to Buyer than so represented,
warranted or covenanted. Notwithstanding anything in this Agreement to
the contrary, it is hereby agreed that solely for the purposes of the
calculation of Damages pursuant to this Article XI, all materiality and
Material Adverse Effect exceptions and qualifications set forth in any
representation or warranty contained in this Agreement shall be
disregarded.
Section 11.3. Indemnification by Buyer and FTI.
(a) Subject to the limitations set forth in Section 11.4
of this Agreement, Buyer and FTI shall indemnify and hold harmless
Sellers, Nextera and their respective affiliates, officers, directors,
stockholders, agents and each of their respective heirs, successors,
assigns and executors ("SELLER INDEMNIFIED PARTIES") from and against
any and all Damages asserted against, resulting to, imposed upon, or
incurred or suffered by any Seller Indemnified Party, directly or
indirectly, as a result of or arising from the following (collectively,
"BUYER INDEMNIFIABLE CLAIMS"):
(A) Any inaccuracy in or breach or nonfulfillment of
any of the representations, warrants, covenants, or agreements
made by Buyer or FTI in this Agreement;
(B) Any Assumed Liabilities; or
(C) Any liability or obligation incurred by Buyer or
FTI prior to the Closing not related to the Business.
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(b) Damages shall be determined without regard to whether
or not, apart from the Buyer Indemnifiable Claim with respect to such
Damages, the transactions provided for in this Agreement prove
generally to be favorable to Seller and without regard to whether or
not the facts and circumstances covered by any representation, warranty
or covenant prove to be more favorable to Seller than so represented,
warranted or covenanted. Notwithstanding anything in this Agreement to
the contrary, it is hereby agreed that solely for the purposes of the
calculation of Damages pursuant to this Article X, all materiality and
Material Adverse Effect exceptions and qualifications set forth in any
representation or warranty contained in this Agreement shall be
disregarded.
Section 11.4. Limitations on Indemnification. Rights to
indemnification hereunder are subject to the following limitations:
(a) The Parties shall not be entitled to indemnification
hereunder with respect to a Seller Indemnifiable Claim or Buyer
Indemnifiable Claim, as the case may be (either of a Seller
Indemnifiable Claim or Buyer Indemnifiable Claim, as the case may be,
an "INDEMNIFIABLE CLAIM") (or, if more than one Indemnifiable Claim is
asserted, with respect to all Indemnifiable Claims) unless the
aggregate amount of Damages with respect to such Indemnifiable Claim or
Claims exceeds One Million Dollars ($1,000,000), in which event the
indemnity provided for in Section 11.2 or 11.3 hereof shall be
effective with respect to Indemnifiable Claims in excess of such Two
Hundred Fifty Thousand Dollars ($250,000) amount (the "FLOOR").
Additionally, a claim shall not be considered an Indemnifiable Claim
unless it individually (along with related claims) exceeds Twenty-Five
Thousand Dollars ($25,000). The foregoing One Million Dollars
($1,000,000) aggregate deductible amount and the Twenty-Five Thousand
Dollars ($25,000) individual claim amount shall not be applicable and
shall not limit any indemnification sought with respect to claims
asserted by third parties. In no event shall the indemnification
obligation of Sellers or Nextera arising under this Article XI exceed
an amount equal to Sixty-Five Million Dollars ($65,000,000) in the
aggregate. In no event shall the indemnification obligation of Buyer
arising under this Article XI exceed Thirteen Million Dollars
($13,000,000) in the aggregate. Notwithstanding the foregoing, none of
the limitations on indemnification set forth in this Section 11.4(a)
will apply to (i) Sellers' or Nextera's breach of representations made
in Section 5.1, 5.2, 5.6, 5.11, 5.12, 5.14, 5.16, 6.1, 6.2, 6.3, 6.4
and 8.7 (ii) any Seller Indemnifiable Claims by Buyer pursuant to
Section 11.2(a)(B), 11.2(a)(C) or 11.2(a)(D) or (iii) any Buyer
Indemnifiable Claims by Seller pursuant to Section 11.3(a)(B) or
11.3(a)(C).
(b) All indemnity payments payable hereunder shall be
paid in immediately available funds within five (5) Business Days after
the later of (i) the receipt of a written request from the party
entitled to such indemnification payment and (ii) the day of payment of
the amount that is the subject of the indemnification payment by the
Party entitled to receive the indemnification payment. All such
indemnification payments shall be made to the accounts and in the
manner specified in writing by the Party entitled to receive such
indemnification payments.
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Section 11.5. Procedure for Indemnification with Respect to
Third-Party Claims.
(a) If either Party (the "INDEMNIFIED PARTY") determines
to seek indemnification under this Article with respect to
Indemnifiable Claims resulting from the assertion of liability by third
parties, it shall give notice to the other party (the "INDEMNIFYING
PARTY") within ten (10) days of the Indemnified Party's becoming aware
of any such Indemnifiable Claim or of facts upon which any such
Indemnifiable Claim will be based; the notice shall set forth such
information with respect thereto as is then reasonably available to the
Indemnified Party. If any such liability is asserted against the
Indemnified Party, and the Indemnified Party notifies the Indemnifying
Party thereof, the Indemnifying Party will be entitled, if it so elects
by written notice delivered to the Indemnified Party within twenty (20)
days after receiving the Indemnified Party's notice, to assume the
defense thereof with counsel satisfactory to the Indemnified Party.
Notwithstanding the foregoing, (i) the Indemnified Party shall also
have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the Indemnified
Party; and (ii) the rights of the Indemnified Party to be indemnified
hereunder in respect of Indemnifiable Claims resulting from the
assertion of liability by third parties shall not be adversely affected
by its failure to give notice pursuant to the foregoing unless, and, if
so, only to the extent that, the Indemnifying Party is materially
prejudiced thereby. With respect to any assertion of liability by a
third party that results in an Indemnifiable Claim, the Parties hereto
shall make available to each other all relevant information in their
possession material to any such assertion.
(b) In the event that the Indemnifying Party, within
twenty (20) days after receipt of the aforesaid notice of an
Indemnifiable Claim, fails to assume the defense of the Indemnified
Party against such Indemnifiable Claim, the Indemnified Party shall
have the right to undertake the defense, compromise or settlement of
such action on behalf of and for the account and risk of the
Indemnifying Party with the consent of the Indemnifying Party, which
consent shall not be unreasonably withheld.
(c) Notwithstanding anything in this Section to the
contrary, (i) if there is a reasonable probability that an
Indemnifiable Claim may materially and adversely affect Buyer or FTI,
other than as a result of money damages or other money payments, Buyer
and FTI shall have the right to defend, compromise or settle such
Indemnifiable Claim; and (ii) Sellers and Nextera shall not, without
Buyer's written consent, settle or compromise any Indemnifiable Claim
or consent to entry of any judgment in respect thereof unless such
settlement, compromise or consent includes as an unconditional term
thereof providing for the giving by the claimant or the plaintiff to
Buyer and FTI a release from all liability in respect of such
Indemnifiable Claim.
Section 11.6. Insurance Proceeds; Recoveries under Section 3.5. To
the extent that any Indemnifiable Claim is covered by insurance held by the
Indemnified Party, such Indemnified Party shall be entitled to indemnification
pursuant to this Article XI only with respect to the amount of Damages that are
in excess of the cash proceeds received by such Indemnified Party pursuant to
such insurance. If such Indemnified Party receives such cash insurance proceeds
prior to the time such Indemnifiable Claim is paid, then the amount payable by
the Indemnifying Party pursuant to such Indemnifiable Claim shall be reduced by
the amount of such insurance
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proceeds. If such Indemnified Party receives such cash insurance proceeds after
such Indemnifiable Claim is paid, then upon receipt by the Indemnified Party of
any cash proceeds pursuant to such insurance up to the amount of the Damages
incurred by such Indemnified Party with respect to such Indemnifiable Claim,
such Indemnified Party shall repay any portion of such amount which was
previously paid by the Indemnifying Party to the Indemnified Party in
satisfaction of such Indemnifiable Claim. In addition to the foregoing, the
Parties acknowledge and agree that, if FTI and Buyer have received a recovery or
compensation under Section 3.5 for uncollectible Receivables or any Estimated
Working Capital Discrepancy Amount, FTI and Buyer shall have no right to make
any additional claim under Article XI to the extent of the amount of such claim
that has been recovered or compensated under Section 3.5.
ARTICLE XII
TERMINATION
Section 12.1. Termination. This Agreement may be terminated at any
time prior to the Closing by written notice:
(a) by mutual written agreement of FTI and Nextera in
each case duly authorized by their respective Boards of Directors or a
duly authorized committee thereof;
(b) by either FTI or Nextera, if
(i) the transactions contemplated by this
Agreement have not been consummated by December 31, 2003; provided,
however, that such date shall be extended to February 29, 2004 if the
transactions contemplated by this Agreement have not been consummated
by December 31, 2003 as a result of delays in connection with comments,
questions or documentary or informational requests from the SEC in
connection with the Proxy Statement or from the Department of Justice
or the Federal Trade Commission in connection with the Parties' filings
under the HSR Act (as such date may be extended, the "END DATE");
provided, however, that the right to terminate this Agreement under
this Section 12.1(b)(i) shall not be available to any Party whose
breach of any provision of this Agreement has resulted in the failure
of the transactions contemplated by this Agreement to occur on or
before the date this Agreement is sought to be terminated pursuant to
this clause (i);
(ii) there shall be any law that makes
consummation of the transactions contemplated by this Agreement illegal
or otherwise prohibited or any judgment, injunction, order or decree of
any Governmental Authority having competent jurisdiction enjoining
Nextera, Sellers, FTI or Buyer from consummating such transactions is
entered and the injunction, judgment, order or decree shall have become
final and nonappealable and, prior to that termination, the Parties
shall have used reasonable best efforts to resist, resolve or lift, as
applicable, the law, judgment, injunction, order or decree; or (A) the
Nextera Stockholder Meeting has been convened and concluded and (B) the
Nextera Stockholder Approval shall not have been obtained; or
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(iii) if the Nextera Stockholder Meeting
(including any postponements and adjournments thereof) shall have been
held and completed and the Nextera Stockholders shall have taken a
final vote on the Nextera Recommendation and the Nextera Stockholder
Approval shall not have been obtained;
(c) by Nextera:
(i) if a breach of or failure to perform in any material
respect any representation, warranty, covenant or agreement on the part
of Buyer or FTI set forth in this Agreement shall have occurred which
would cause any of the conditions set forth in Article X not to be
satisfied, and such condition shall be incapable of being satisfied by
the End Date; or
(ii) as contemplated by Section 7.4(b)(iii); provided,
however, that no such termination shall relieve Nextera or Sellers from
their obligations under Section 12.2(c) below; or
(d) by FTI, if:
(i) a breach of or failure to perform in any
material respect any representation, warranty, covenant or agreement on
the part of Nextera or Sellers set forth in this Agreement shall have
occurred which would cause any of the conditions set forth in Article
IX not to be satisfied, and such condition is incapable of being
satisfied by the End Date;
(ii) (A) the Board of Directors of Nextera (1)
amends, withdraws, modifies, changes, conditions or qualifies the
Nextera Recommendation in a manner adverse to Buyer and the
transactions contemplated by this Agreement; (2) approves or recommends
to the Nextera Stockholders an Acquisition Proposal (other than by
Buyer as contemplated by this Agreement); or (3) approves a resolution
or agrees to do any of the matters set forth in the immediately
foregoing clauses (1) and (2); or (B) after the third Business Day
following Buyer's receipt of a Notice of Superior Proposal, unless
prior to such termination (x) a new Notice of Superior Proposal has
been delivered with respect to an Acquisition Proposal by a different
Person than the prior Notice of Superior Proposal (in which event, such
new Notice of Superior Proposal shall then be subject to this Section
12.1(d)(ii)(B)), (y) a new Notice of Superior Proposal has been
delivered with respect to a Modified Superior Proposal (in which event,
such new Notice of Superior Proposal shall then be subject to this
Section 12.1(d)(ii)(B)) or (z) Nextera shall have irrevocably withdrawn
such Notice of Superior Proposal and terminated all discussions and
negotiations with such Person regarding any Acquisition Proposal; or
(iii) any Person or group (other than Buyer or its
affiliates) acquires beneficial ownership of a majority of the
outstanding capital stock of Sellers or Nextera.
Section 12.2. Effect of Termination.
(a) If this Agreement is terminated pursuant to Section
12.1 (except as provided in Section 12.2(b) below), there shall be no
liability or obligation on the part of
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Buyer, FTI, Sellers, Nextera, or any of their respective officers,
directors, stockholders, agents or affiliates, except no such
termination shall relieve any Party hereto of any liability or damages
resulting from any willful breach of this Agreement; provided that the
provisions of Sections 8.3, 8.5, 12.2, 12.3 and Article XI of this
Agreement shall remain in full force and effect and survive any
termination of this Agreement.
(b) In the event that this Agreement is terminated by any
Party pursuant to Section 12.1(b)(i) (provided that at the time of such
termination, the condition precedent in Section 9.2(a) and Section
10.2(a) shall have been satisfied), Nextera shall pay to FTI up to One
Million Five Hundred Thousand Dollars ($1,500,000) of Buyer's and FTI's
reasonable actual out-of-pocket legal, investment banking and
accounting expenses through the date of such termination.
(c) In the event that:
(A) this Agreement is terminated by FTI pursuant to
Section 12.1(d)(ii) or Section 12.1(d)(iii);
(B) this Agreement is terminated by Nextera pursuant
to Section 12.1(c)(ii);
(C) this Agreement is terminated pursuant to Section
12.1(b)(iii); or
(D) this Agreement is terminated pursuant to Section
12.1(b)(i) (provided that at the time of such termination, the
condition precedent in Section 9.2(a) and Section 10.2(a)
shall have been satisfied) or Section 12.1(d)(i) and, in each
case, Sellers and Nextera shall have disclosed, announced or
accepted an Acquisition Proposal;
then Nextera shall pay to FTI (in immediately available funds
to an account designated by FTI) (the "TERMINATION FEE"):
(1) within five (5) Business Days following
Nextera's receipt of documentation describing in reasonable
detail Buyer's reasonable actual out-of-pocket legal,
investment banking and accounting expenses, a cash amount
equal to (x) up to One Million Five Hundred Thousand Dollars
($1,500,000) of such reasonable actual out-of-pocket legal,
investment banking and accounting expenses through the date of
such termination and (y) an additional One Million Dollars
($1,000,000); and
(2) if a Superior Proposal is consummated by
Sellers or Nextera within twelve (12) months after the
occurrence of the event giving rise to such termination,
within five (5) Business Days following the consummation of
such Superior Proposal a cash amount equal to Three Million
Five Hundred Thousand Dollars ($3,500,000); and
Sellers and Nextera agree to use reasonable commercial efforts
to consummate any Superior Proposal that causes any termination of this
Agreement under Section 12.1(c)(ii).
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The Parties acknowledge and agree that Nextera will in no event be required to
pay more than One Million Five Hundred Thousand Dollars ($1,500,000) of Buyer's
reasonable actual out-of-pocket legal, investment banking and accounting
expenses, and that such amount shall be required to be paid by Nextera only
once.
Section 12.3. Fees And Expenses. Except as otherwise specifically
provided herein, all fees and expenses incurred in connection herewith and the
transactions contemplated hereby shall be paid by the Party incurring expenses,
whether or not the transactions contemplated hereby are consummated.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1. Notices. All notices and other communications
required or permitted under this Agreement shall be deemed to have been duly
given and made if in writing (a) at the time it is served either by personal
delivery to the Party for whom intended (b) five (5) days after the date it is
deposited, postage prepaid, certified or registered mail, return receipt
requested, in the United States mail bearing the address shown in this Agreement
for, or such other address as may be designated in writing hereafter by, such
Party or (c) if given by facsimile, when the facsimile is transmitted to the
facsimile number specified in this Section and the appropriate facsimile
confirmation is received:
If to Buyer or FTI: FTI Consulting, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Esq.
Xxxxxxxx Xxxxxx
Fax: 000-000-0000
with a copy to: Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx,
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Fax: 000-000-0000
If to Sellers or Nextera: Nextera Enterprises, Inc.
Xxx Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Fax: 000-000-0000
with a copy to: Maron & Sandler
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax: 000-000-0000
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Section 13.2. Entire Agreement. This Agreement, the exhibits and
schedules hereto, and the documents referred to herein, along with the
Confidentiality Agreement, embody the entire agreement and understanding of the
Parties hereto with respect to the subject matter hereof, and supersede all
prior and contemporaneous agreements and understandings, oral or written,
relative to said subject matter.
Section 13.3. Binding Effect; Assignment. This Agreement and the
various rights and obligations arising hereunder shall inure to the benefit of
and be binding upon Sellers and Nextera, their successors and permitted assigns,
and Buyer and FTI, their successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
transferred or assigned (by operation of law or otherwise) by any of the Parties
hereto without the prior written consent of the other Party or Parties;
provided, however, that the Buyer may assign at any time after the date hereof
any of its rights under this Agreement, in whole or in part, to any affiliate of
Buyer without obtaining the consent of Sellers or Nextera. Any transfer or
assignment of any of the rights, interests or obligations hereunder in violation
of the terms hereof shall be void and of no force or effect.
Section 13.4. Captions. The Article and Section headings of this
Agreement are inserted for convenience only and shall not constitute a part of
this Agreement in construing or interpreting any provision hereof.
Section 13.5. Waiver; Consent. This Agreement may not be changed,
amended, terminated, augmented, rescinded or discharged (other than by
performance), in whole or in part, except by a writing executed by all of the
Parties hereto, and no waiver of any of the provisions or conditions of this
Agreement or any of the rights of a Party hereto shall be effective or binding
unless such waiver shall be in writing and signed by the Party claimed to have
given or consented thereto. Except to the extent that a Party hereto may have
otherwise agreed in writing, no waiver by that Party of any condition of this
Agreement or breach by the other Party of any of its obligations or
representations hereunder or thereunder shall be deemed to be a waiver of any
other condition or subsequent or prior breach of the same or any other
obligation or representation by the other Party, nor shall any forbearance by
the first Party to seek a remedy for any noncompliance or breach by the other
Party be deemed to be a waiver by the first Party of its rights and remedies
with respect to such noncompliance or breach.
Section 13.6. No Third Party Beneficiaries. Subject to Section 13.3
hereof, nothing herein, expressed or implied, is intended or shall be construed
to confer upon or give to any person, firm, corporation or legal entity, other
than the Parties hereto, any rights, remedies or other benefits under or by
reason of this Agreement.
Section 13.7. Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
Section 13.8. Gender. Whenever the context requires, words used in
the singular shall be construed to mean or include the plural and vice versa,
and pronouns of any gender shall be deemed to include and designate the
masculine, feminine or neuter gender.
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Section 13.9. Remedies of Buyer. The Assets are unique and not
readily available. Accordingly, Sellers and Nextera acknowledge that, in
addition to all other remedies to which Buyer and FTI are entitled, Buyer and
FTI shall have the right to enforce the terms of this Agreement by a decree of
specific performance, provided Buyer and FTI are not in material default
hereunder. The rights and remedies conferred upon Buyer and FTI under this
Agreement or by any instrument or law shall be cumulative and may be exercised
singularly or concurrently.
Section 13.10. No Personal Liability. FTI and Buyer acknowledge that
the individuals executing the Transaction Agreements or any exhibit, schedule or
agreement delivered by Sellers or Nextera in connection with this Agreement and
the individuals included in the definition of Knowledge with respect to Sellers
and Nextera are acting in their respect capacities as officers of Sellers and/or
Nextera and such individuals shall have no personal liability to FTI or Buyer
for any matter set forth herein or in such other exhibit, schedule or agreement.
Section 13.11. Governing Law. This Agreement shall in all respects
be construed in accordance with and governed by the laws of the State of New
York. It is the intention of the Parties that this Agreement shall be deemed to
have been entered into in New York County, New York and that the laws of the
State of New York should govern the validity of this Agreement, the construction
of its terms and the interpretation of the rights and duties of the Parties. The
Parties agree to non-exclusive jurisdiction in any federal, state or local
courts located in, or otherwise, having jurisdiction over Xxx Xxxx Xxxxxx xx Xxx
Xxxx Xxxx, Xxx Xxxx as well as non-exclusive jurisdiction in any federal, state
or local courts located in, or otherwise, having jurisdiction over Los Angeles
County or the City of Los Angeles, California and the Parties hereby consent to
personal jurisdiction in such courts and waive any objection based on Forum Non
Coveniens and any objection to jurisdiction or venue of any action instituted
hereunder.
Section 13.12. Definitions. The following terms, whenever used in
this Agreement, shall have the respective meanings set forth below:
"ACCOUNTING REFEREE" shall have the meaning set forth in Section
3.5(i).
"ACQUISITION PROPOSAL" means any offer or proposal (whether or not in
writing) from any Person, other than as contemplated by this Agreement,
regarding any of the following: (a) a transaction pursuant to which any Person
or "group" (as such term is defined in Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder) acquires or would acquire
beneficial ownership of more than twenty percent (20%) of the total outstanding
shares voting securities of Sellers or Nextera, whether from the stockholders of
Sellers or Nextera (in the case of Seller) pursuant to a tender offer or
exchange offer or otherwise, (b) a merger, consolidation, business combination,
reorganization, sale of all or substantially all assets, recapitalization,
liquidation, dissolution or similar transaction involving Sellers or Nextera, or
(c) any transaction which would result in a Person or group acquiring more than
20% of the fair market value on a consolidated basis of the assets (including,
without limitation, the capital stock of subsidiaries) of Sellers or Nextera's
other subsidiaries immediately prior to such transaction (whether by purchase of
assets, acquisition of stock of a subsidiary or otherwise).
"AFFILIATE" shall have the meaning set forth in Section 5.16(a).
- 54 -
"AGREEMENT" shall have the meaning set forth in the Preamble.
"ANNUAL FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 5.3(a).
"APPLICABLE LAWS" shall have the meaning set forth in Section 5.7.
"ASSETS" shall have the meaning set forth in Section 1.1.
"ASSUMED EMPLOYMENT LIABILITIES" shall have the meaning set forth in
Section 8.4.
"ASSUMED LIABILITIES" shall have the meaning set forth in Section 2.1.
"BALANCE SHEET DATE" means the date of the audit of the financial
statements of Lexecon.
"BASE RECEIVABLES" shall have the meaning set forth in Section 3.5(g).
"BUSINESS" shall have the meaning set forth in the Preliminary
Statements.
"BUSINESS DAY" means any day, other than a Saturday, Sunday or one on
which banks are authorized by Law to be closed in New York, New York.
"BUSINESS RECORDS" shall have the meaning set forth in Section 1.1(m).
"BUYER" shall have the meaning set forth in the Preamble.
"BUYER INDEMNIFIED PARTIES" shall have the meaning set forth in Section
11.2(a).
"BUYER INDEMNIFIABLE CLAIMS" shall have the meaning set forth in
Section 11.3(a).
"CASH CLOSING AMOUNT" shall have the meaning set forth in Section 3.2.
"CLAIMS" shall have the meaning set forth in Section 1.1(l).
"CLOSING" shall have the meaning set forth in Section 4.1.
"CLOSING DATE" shall have the meaning set forth in Section 4.1.
"CLOSING DATE BALANCE SHEET" shall have the meaning set forth in
Section 3.5(e)(ii).
"CLOSING WORKING CAPITAL" shall have the meaning set forth in Section
3.5(e)(ii).
"CLOSING WORKING CAPITAL DISCREPANCY AMOUNT" shall have the meaning set
forth in Section 3.5(f).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLECTIBLE ACCOUNTS RECEIVABLE DETERMINATION" shall have the meaning
set forth in Section 3.5(g).
- 55 -
"COLLECTION REVIEW PERIOD" shall have the meaning set forth in Section
3.5(e).
"CONFIDENTIALITY AGREEMENT" shall have the meaning set forth in Section
8.5.
"CONTRACTS" shall have the meaning set forth in Section 1.1(c).
"COPYRIGHTS" shall have the meaning set forth in Section 1.1(g).
"CURRENT ASSETS" shall mean, without duplication, the sum of the
following line items set forth on the applicable balance sheet, in each case
accounted for in accordance with GAAP: (i) Accounts and Notes Receivable and
(ii) Prepaids and Other Current Assets, including, without limitation, the IPO
Case Receivables.
"CURRENT LIABILITIES" shall mean, without duplication, the sum of the
following line items set forth on the applicable balance sheet, in each case
accounted for in accordance with GAAP: (i) Accounts Payable and Accrued
Liabilities and (ii) Capital Lease Obligations - Current, including, without
limitation, Sellers' payment obligations relating to the IPO Case Receivables.
Any liability that would be classified as a Current Liability for purposes of
this definition but which is also classified as "Indebtedness" under the
definition thereof in this Section 13.12 shall be treated as Indebtedness and
shall not be treated as a Current Liability for purposes of the calculations in
Section 3.5 hereof.
"DAMAGES" shall have the meaning set forth in Section 11.2(a).
"DISCREPANCY REPAYMENT" shall have the meaning set forth in Section
3.5(f).
"DGCL" means the Delaware General Corporate Law, as amended.
"EMPLOYMENT AGREEMENT" shall have the meaning set forth in Section 7.6.
"ENCUMBRANCE" means any claim, lien, pledge, option, charge, easement,
security interest, encumbrance or other right of third parties; provided,
however, that Encumbrances shall not include any: (a) Encumbrances for Taxes or
other governmental charges not yet due and payable by a Person or the amount or
validity of which is being contested by such Person in good faith by appropriate
proceedings; (b) zoning, entitlement, building and other land use regulations
imposed by governmental agencies having jurisdiction over the real property
which are not violated by the current use and operation of the real property by
Sellers or Nextera; (c) covenants, conditions, restrictions, easements and other
matters of record affecting title to the real property which do not unreasonably
interfere with the current use, occupancy, or value, or the marketability of
title, of real property; and (d) Encumbrances arising under original purchase
price conditional sales contracts and equipment leases with third parties in the
ordinary course of business, including without limitation, the Personal Property
Leases.
"END DATE" shall have the meaning set forth in Section 12.1(b)(i).
"ENVIRONMENTAL LAWS" means all applicable laws in effect as of the
Closing Date which deal with Solid Waste, hazardous waste, wastewater
discharges, water quality, drinking water, air emissions, air quality (indoor or
outdoor), Hazardous Substances, asbestos, toxic substances,
- 56 -
radioactive materials or waste, petroleum or its derivatives, wetlands,
lead-based paint, radon, employee health and safety or community right-to-know.
"ERISA" shall have the meaning set forth in Section 5.16(a).
"ERISA AFFILIATE" shall have the meaning set forth in Section 5.16(a).
"ESCROW AGREEMENT" shall have the meaning set forth in Section 3.2(b).
"ESCROW AMOUNT" means One Million, Five Hundred Thousand Dollars
($1,500,000).
"ESTIMATED CLOSING BALANCE SHEET" shall have the meaning set forth in
Section 3.5(b).
"ESTIMATED CLOSING WORKING CAPITAL" shall have the meaning set forth in
Section 3.5(b).
"ESTIMATED WORKING CAPITAL DISCREPANCY AMOUNT" shall have the meaning
set forth in Section 3.5(d).
"EXCHANGE ACT" shall have the meaning set forth in Section 7.4(a)(iii).
"EXCLUDED ASSETS" shall have the meaning set forth in Section 1.2.
"FICTITIOUS NAME" shall have the meaning set forth in Section 9.16.
"FLOOR" shall have the meaning set forth in Section 11.4.
"FORMATION DOCUMENTS" shall have the meaning set forth in Section 5.1.
"FTI" shall have the meaning set forth in the Preamble.
"GAAP" means United States generally accepted accounting principles and
practices, consistently applied.
"GOODWILL" shall have the meaning set forth in Section 1.1(n).
"GOVERNMENTAL AUTHORITY" means any federal, state, or local
governmental authority or instrumentality, including any court, tribunal or
administrative agency, department, bureau, commission or board.
"HAZARDOUS SUBSTANCES" means asbestos, radioactive substances, radon,
PCBs, petroleum and any substance deemed under federal or applicable state law
or regulation a hazardous or toxic substance, material, chemical substance,
pollutant, waste, pesticide or fungicide.
"HIRED EMPLOYEES" shall have the meaning set forth in Section 8.4.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
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"INDEBTEDNESS" of each of Sellers and Nextera shall include, without
duplication: (i) all indebtedness of Sellers and Nextera for borrowed money or
for the deferred purchase price of property or services (other than current
liabilities for trade payables incurred and payable in the ordinary course of
business); (ii) any other indebtedness of Sellers or Nextera which is evidenced
by a note, mortgage, bond, debenture or similar instrument; (iii) all long-term
obligations of Sellers or Nextera under capitalized leases; (iv) all loans to
Sellers or Nextera from officers or stockholders; (v) all liabilities of Sellers
or Nextera related to lease obligations for closed offices; (vi) all liabilities
of Sellers or Nextera for the payment of money related to acquisitions of or by
Sellers or Nextera; (vii) net liabilities associated with intercompany balances
and (viii) the portion calculable and non-contingent as of the Closing Date,
whether or not then payable, of amounts required to be paid by Sellers or
Nextera resulting from or triggered by the Closing pursuant to a non-compete
payment obligation or change of control payment obligation, in each case
including all accrued and unpaid interest (including, without limitation, the
non-complete payments set forth on Schedule 9.19), but excluding any non-compete
payments listed on Schedule 8.4.
"INDEMNIFIABLE CLAIMS" shall have the meaning set forth in Section
11.4(a).
"INDEMNIFIED PARTY" shall have the meaning set forth in Section
11.5(a).
"INDEMNIFYING PARTY" shall have the meaning set forth in Section
11.5(a).
"IPO CASE RECEIVABLES" means Receivables in an amount not to exceed One
Million, Five Hundred Fifty Thousand Dollars ($1,550,000) that are related to
the matters set forth as Items 112 and 123 on Schedule 5.26 under the caption
"Other Contracts."
"JUNE BALANCE SHEET" shall have the meaning set forth in Section
5.3(a).
"KNOWLEDGE" means (a) with respect to the Sellers or Nextera, the
actual knowledge of Xxxxxx Xxxxxxx, Xxxxxxx Xxxxx, Xxxxxx Xxxxxxx, Xxxxx
Xxxxxxx, Xxxxxx Xxxx, Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxx and Xxxx Xxxxxxx and
(b) with respect to Buyer or FTI, the actual knowledge of Xxxx Xxxx, Xxxxxx
Xxxx, Xxxxxxxx Xxxxxx and Xxxxxx Xxxxxx.
"LEASE ASSIGNMENT" shall have the meaning set forth in Section 9.13.
"LEASED REAL PROPERTY" shall have the meaning set forth in Section
5.23.
"LIABILITY" means any liability or obligation (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether due or to
become due).
"LITIGATION" means any litigation, legal action, arbitration,
proceeding, demand, claim or investigation, whether or not pending or threatened
on the Closing Date, affecting or brought by or against Sellers or the Assets,
with respect to events, circumstances, actions or inactions occurring or
existing prior to the Closing.
"MARKS" shall have the meaning set forth in Section 1.1(g).
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"MATERIAL ADVERSE EFFECT" shall have the meaning set forth in Section
5.4.
"MEDICAL PLAN PAYMENT" means the amount designated by Sellers in a
writing delivered to Buyer five (5) days prior to the Closing Date, which
represents Sellers' good faith estimate of the Liabilities under Sellers'
self-insured medical plan that have been incurred in accordance with past
practice as of the Closing Date.
"MODIFIED SUPERIOR PROPOSAL" shall have the meaning set forth in
Section 7.4(b)(iii).
"MULTIEMPLOYER PLAN" shall have the meaning set forth in Section
5.16(c).
"MULTIPLE EMPLOYER PLAN" shall have the meaning set forth in Section
5.16(c).
"NEXTERA" shall have the meaning set forth in the Preamble.
"NEXTERA CLASS A COMMON STOCK" means the class A common stock, par
value $0.001 per share of Nextera.
"NEXTERA CLASS B COMMON STOCK" means the class B common stock, par
value $0.001 per share of Nextera.
"NEXTERA COMMON STOCK" means Nextera Class B Common Stock and Nextera
Class A Common Stock.
"NEXTERA PREFERRED STOCK" means the series A cumulative convertible
preferred stock, par value $0.001 per share of Nextera.
"NEXTERA RECOMMENDATION" shall have the meaning set forth in Section
7.3.
"NEXTERA STOCK" means Nextera Class A Common Stock, Nextera Class B
Common Stock and Nextera Preferred Stock.
"NEXTERA STOCKHOLDER APPROVAL" shall have the meaning set forth in
Section 5.2(b).
"NEXTERA STOCKHOLDER MEETING" shall have the meaning set forth in
Section 7.3.
"NEXTERA STOCKHOLDERS" means all of the holders of the outstanding
Nextera Stock.
"NON-COMPETE AGREEMENTS" shall have the meaning set forth in Section
2.2.
"NOTICE OF SUPERIOR PROPOSAL" shall have the meaning set forth in
Section 7.4(b)(iii).
"OWNED INTELLECTUAL PROPERTY" shall have the meaning set forth in
Section 5.8(a).
"PATENTS" shall have the meaning set forth in Section 1.1(g).
"PARTIES" shall have the meaning set forth in the Preamble.
"PERMITS" shall have the meaning set forth in Section 1.1(f).
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"PERMITTED ACTIONS" shall have the meaning set forth in Section
7.4(b)(i).
"PERSON" means an individual, partnership, corporation, association,
joint stock company, limited liability company, trust, joint venture, or
unincorporated organization, however described.
"PERSONAL PROPERTY LEASES" shall have the meaning set forth in Section
1.1(h).
"PERSONAL PROPERTY" shall have the meaning set forth in Section 1.1(b).
"PRE-CLOSING TAX PERIOD" means any taxable period beginning and ending
before the Closing Date.
"PROFIT SHARING PLAN PAYMENT" means the amount designated by Sellers in
writing and delivered to Buyer five (5) days prior to the Closing Date, which
represents Sellers' good faith estimate of the contributions required to be made
in accordance with past practice with respect to the time period ended on the
Closing Date under Sellers' Lexecon Retirement & Savings Plan, which is intended
to qualify under Section 401 of the Code.
"PROPRIETARY RIGHTS" shall have the meaning set forth in Section
1.1(g).
"PROXY STATEMENT" means the proxy statement to be mailed to the Nextera
Stockholders in connection with the Nextera Stockholder Approval, together with
any amendments or supplements thereto, which shall, among other things, set
forth the Nextera Recommendation.
"PURCHASE PRICE" shall have the meaning set forth in Section 3.1.
"REAL PROPERTY LEASES" shall have the meaning set forth in Section
1.1(a).
"RELATED PERSONS" shall have the meaning set forth in Section 5.25.
"RECEIVABLES" shall have the meaning set forth in Section 1.1(i).
"SEC" means the Securities and Exchange Commission.
"SELLER" shall have the meaning set forth in the Preamble.
"SELLER INDEMNIFIED PARTIES" shall have the meaning set forth in
Section 11.3.
"SELLER INDEMNIFIABLE CLAIMS" shall have the meaning set forth in
Section 11.2(a).
"SELLER PLANS" shall have the meaning set forth in Section 5.16(a).
"SELLER PLAN LIABILITIES" means any Liability attributable to a Seller
Plan, including the Seller Plan Payments.
"SELLER PLAN PAYMENTS" means the aggregate of the Profit Sharing Plan
Payment and the Medical Plan Payment.
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"SOFTWARE" shall have the meaning set forth in Section 1.1(g).
"SOLID WASTE" means any substance deemed a waste under any applicable
federal, state, county or local laws, ordinances, rules or regulations and also
infectious waste, residual waste, hazardous waste or nuclear/radioactive waste
regardless of the level of radioactivity.
"STRADDLE PERIOD" means any taxable period beginning before and ending
after the Closing Date.
"SUPERIOR PROPOSAL" means any written, bona fide Acquisition Proposal
that a majority of the disinterested members of the Nextera's Board of Directors
determines in good faith, after considering the advice of outside legal counsel
and financial advisors, would result in a transaction, if consummated, that
would be more favorable to Nextera Stockholders (taking into account all facts
and circumstances, including all legal, financial, regulatory and other aspects
of the proposal and the identity of the offeror) than the transactions
contemplated hereby and is reasonably capable of being consummated (including,
without limitation, the availability of committed financing, to the extent
needed to complete the transaction).
"TAX RETURN" means any tax return, declaration of estimated tax, tax
report or other tax statement, or any other similar filing, including any
schedule or attachment thereto, and including any amendment thereof, required to
be submitted to any Governmental Authority with respect to any Tax.
"TAX" or "TAXES" means any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any government or taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes;
license, registration and documentation fees; and customs duties, tariffs, and
similar charges.
"TERMINATION FEE" shall have the meaning set forth in Section 12.2(b).
"TRADE NAME" shall have the meaning set forth in Section 9.17.
"TRADE SECRETS" shall have the meaning set forth in Section 1.1(g).
"TRANSACTION DOCUMENTS" means this Agreement, and the Escrow Agreement.
"VOTING AGREEMENT" shall have the meaning set forth in the Preliminary
Statements.
"WARN" shall have the meaning set forth in Section 5.15(c).
"WITHHELD RECEIVABLES" means such client accounts receivable that are
designated by Sellers and Nextera from the list of clients set forth on Schedule
13.12 pursuant to Section 3.5 and are equal to the sum of (a) the outstanding
principal balance at Closing under that portion of
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the loan made by Knowledge Universe, Inc. on July 17, 2003 plus (b) the amount
by which one-half (1/2) of the Seller Plan Payments exceeds the Medical Plan
Payment.
"WARRANTIES" shall have the meaning set forth in Section 1.1(k).
"WORK-IN-PROCESS" shall have the meaning set forth in Section 1.1(d).
"WORKING CAPITAL" shall mean Current Assets minus Current Liabilities.
"WORKING CAPITAL SCHEDULE" shall have the meaning set forth in Section
3.5(a).
"WORKING CAPITAL TARGET" shall have the meaning set forth in Section
3.5(d).
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
FTI CONSULTING, INC. LEXECON INC.
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------- --------------------------------
Name: Xxxxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President and Title: Assistant Secretary
Chief Financial Officer
LI ACQUISITION COMPANY, LLC CE ACQUISITION CORP.
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------- --------------------------------
Name: Xxxxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President and Title: Vice President
Chief Financial Officer
ERG ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
NEXTERA ENTERPRISES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chief Operating Officer
and Chief Financial Officer
